Friday, April 6, 2012

39.5 Million Missing Jobs

The following chart shows historical nonfarm payroll jobs. I've included an exponential trend line for the trend that was in place from 1939 to 2000.

Click to enlarge.

The following chart zooms in a bit.

Click to enlarge.

One word: Ugly

The next chart shows the number of "missing" jobs (i.e., the difference between employment and the long-term trend for employment).

Click to enlarge.

The last chart shows historical year over year employment growth and where we currently are relative to it.

Click to enlarge.

Reaching the median has never been so difficult. Last month we were at 1.55%. Now we're at 1.45%. There is a serious risk that we have already peaked.

There was a massive rally in treasury bonds today, much to the ongoing surprise of bondmageddon theorists. On Tuesday, the 30-year bond was 3.41%. Today it is just 3.21%. Most of the drop happened just after the employment report. Big shocker.

Yahoo Message Board: TBT: Option traders bet longer-dated bond yields will rise

I am long 10K shares at 20.46 -- hopefully these traders are correct.

"Hope" may not be warranted at this point.

1. He's quoting an article from yesterday. That's one day before today's abysmal employment report. Good luck on that theory.

2. He was down about 2% heading into today. It gets worse though. TBT, the 2x ultrashort long-term treasury fund that seeks to spew profits when interest rates rise, has not yet priced in any of today's bond market rate decline (due to today being Good Friday). I have only this to say. Ouch.

Disclosure: Nearly my entire net worth sits in a long-term ladder of inflation protected treasuries and I-Bonds with the intent to hold to maturity. Not one thing in today's employment report alters my decision.

This is not investment advice.

See Also:
Job Growth vs. Population Growth

Source Data:
St. Louis Fed: All Employees: Total nonfarm


Troy said...

Here's a chart from my us birth + immigration spreadsheet.

I added PAYEMS actuals back to 1970.

2000 was as good as it got. "Full employment" here is population age 18-60 x 0.7.

Troy said...

^ so yeah, according that chart missing jobs are more like 20M.

Actually, the 20M jobs aren't really missing. If we went back to 1-income households, rents and home values would collapse and so would child-care expenses and transportation costs and we all wouldn't need to work as much anyway.

Stagflationary Mark said...


"^ so yeah, according that chart missing jobs are more like 20M."

This can also be seen if I extrapolate civilian employment instead of nonfarm payroll.

When payroll jobs vanish, people do tend to get inventive at filling the gap.

From last year:

Civilian Employment

I'm also not trying to imply that the jobs are truly missing. It's hard to have 40 million missing jobs with less than 13 million unemployed.

As you imply, I'm simply suggesting that we cannot get back to the previous trend. There will be a new normal and we're most likely probably smack dab in the middle of it.

mab said...

It's all part of the "great moderation"! Too bad it's jobs, private debt creation, real incomes, etc. that are moderating.

Bernanke = Doofus! Hahaha

Stagflationary Mark said...


1. We just need to work.

2. We just need to work smarter.

3. We just need to work in moderation smarter.

4. We just need to be moderated smarter.

5. We just need to be moderated and monitored smarter.

6. We just need to be wire tapped, strip searched, pepper sprayed, finger printed, DNA sampled, tagged, restrained, and detained indefinitely at an undisclosed location for our own protection.

If we don't do these things then the evil doers will win and we will have lost all of the things that made this country great!