Saturday, September 3, 2011

32.4 Million Missing Workers

The following chart shows the civilian labor force (those who have jobs or are seeking jobs). I've included an exponential trend line based on the data from 1948 through 1989.


Click to enlarge.

Here's a chart showing the difference between where we are and the trend line.


Click to enlarge.

Ross Perot on Free Trade (1993)

NAFTA is really less about trade than it is about investment. Its principal goal is to protect US companies and investors operating in Mexico. The text of the agreement is contained in two volumes covering more than 1,100 pages. The text is mind-numbingly dull. Large portions of it are written in the type of obscure legal terms found on the back of an insurance policy. Buried in the fine print are provisions that will give away American jobs and radically reduce the sovereignty of the US.

Mission accomplished. Now what?

It isn't just the trade deficit that hurts us going forward though. Think demographics.


January 14, 2010
Long-term Household Formation Trends

U.S. Census Bureau: State & County QuickFacts

Persons per household, 2000: 2.59




There's a risk that the long-term trend is forming a bottom. There's an additional risk that it won't just bottom, but that it will actually begin to reverse. The stock market's been stagnant for a decade. Unemployment is now extremely high.

The population will most likely continue to grow, but if more and more people live together in the same household ("for economic reasons" as seen above) then that's just one more headwind for the housing market.


Here's an update.

U.S. Census Bureau: State & County QuickFacts

Persons per household, 2005-2009: 2.60

See Also:
This Labor Day Is Different
39.0 Million Missing Payroll Jobs
Missing Jobs vs. Trade Deficit

Source Data:
St. Louis Fed: Civilian Labor Force

9 comments:

Mr Slippery said...

Bringing up Ross Perot forces another personal anecdote out of me. I was hired in 1985 by EDS as a mainframe programmer. After Perot was booted by GM, he started Perot Systems in 1988 and I was hired as employee number #57. I met Perot at my hiring interview. He has one of those Steve Jobs-like reality distortion fields. I wanted to buy something from him before I left. Hehe. I ended up leaving in 1991 for a number of reasons, but I still have friends that work there (now Dell-Perot Systems).

Perot was right about a lot of things then, but he didn't have the temperament to make it as a politician. Same reason he was booted from GM. Memories.

Stagflationary Mark said...

Mr Slippery,

If you can't stand a little sacrifice and you can't stand a trip across the desert with limited water, we're never going to straighten this country out. - Ross Perot

We're never going to straighten this country out. Sigh.

fried said...

Re household formation...I would be surprised if it doesn't reverse. Think debt-laden college grads with McJobs, if any. Long-term unemployed adults heading back to the parents for shelter.And folks hoping to retire with less than adequate savings...doubling up might make it workable. IIRC, the birth rate among native-born Americans is down as well.
Yes, we have a housing glut.

Stagflationary Mark said...

fried,

I had two roommates for nearly a year just after college. Didn't have college debt, but I also didn't much money. I moved to Seattle looking for a career. That was the late 80s.

And let's not forget older parents moving in with their kids. I've offered that to my mom. If she takes me up on it someday, her house will be for sale.

tj and the bear said...

IMHO (for many years now) that average household size will in fact bottom & reverse. Same for bond rates. The upside for both will be cruel to many markets.

Stagflationary Mark said...
This comment has been removed by the author.
Stagflationary Mark said...

tj and the bear,

I'm not convinced on the bond rates, not that it really matters much.

5-year TIPS yielding an inflation adjusted -0.84% per year offer their own form of cruelty over the long-term, as do 3 month treasury bills locked at 0% when inflation has been running much hotter than that.

Further, should real interest rates remain this low for longer than either of us can possibly imagine, it will only be because the entire global economy has hit the brick wall and cannot plow its way through it. Sigh.

Plenty of cruelty still coming. I believe that.

tj and the bear said...

Further, should real interest rates remain this low for longer than either of us can possibly imagine, it will only be because the entire global economy has hit the brick wall and cannot plow its way through it. Sigh.

That's been precisely my point to people looking for a RE bottom:
(A) We're Japan and housing will continue it's slow spiral downward;
(B) We're not Japan, rates soar, and housing will drop like a rock.

Any wonder I'm still renting?

Stagflationary Mark said...

tj and the bear,

Nice. My take is similar regarding TIPS.

(A) We're Japan, inflation rates stay low, TIPS held to maturity do okay.
(B) We're not Japan, rates soar due to inflation, TIPS held to maturity do okay.