Variations of these graphs are going around

[solarbird]

Okay, a second short thing. Remember the bank "stress tests" and the jobs savings projected by the Obama economic recovery plan? They had various assumptions built in. The first is the "stress test," which was supposed to determine capital requirements needed for banks to handle two scenarios - the "baseline" and the "more adverse" environment projections. Here's how that's working out so far, graph courtesy Mish Shedlock from his post, here:


The "baseline" scenario was consensus unemployment; the "more adverse" was a "really bad case" projection. That red dot is where we are. And unless that spikes back down soon, that's ... not good.

You're also seeing another chart going around, this one; the upper curve is the consensus forecast again, the lower curve is the with-recovery-package projection. I haven't verified this data but the upper curve does match the consensus forecast.

Both relate back to a paper I really need to get off my ass and finish reading, "Forecasting the Depression," on how most economists continually misread future trending throughout the Great Depression, and how there would good reasons for that - valid ones. But despite that, you get realities like this:


Chart courtesy American Economic Review, from the paper
"Forecasting the Depression: Harvard vs. Yale,"
by Kathryn M. DOMINGUEZ, Ray C. FAIR, and Matthew D. SHAPIRO.
Now, given how completely the usual suspects have missed this cycle throughout - the parallels are close enough to be disturbing - I am and have been reacting very suspiciously to projections for the better further out. The last time we had one of these, none of the systems behaved as per their usual histories. Keep that in mind.

Comments

Re: Oh, but to actually address the comment

[galbinus-caeli.livejournal.com]

Thank you for the clarification. So, what is the "real" unemployment rate? What percentage of people who are capable, willing, and desiring, to do full time work are not doing so.

Re: Oh, but to actually address the comment

[solarbird]

That's the U-6 figure (U-6 Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers), and it's currently at 16.4% (seasonally adjusted). (Non-seasonally adjusted is 15.9%, but seasonal adjustment makes sense in employment. The reported U-3 number is also seasonally adjusted. You can read more about it in the BLS report.

Re: Oh, but to actually address the comment

[galbinus-caeli.livejournal.com]

So basically one person in six who should be working, isn't. That seems about right. And terrible.