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All America's Possible Futures


The paths we could take, and the one we should.


The present contains all possible futures. But not all futures are good ones. Some can be quite cruel. The one we actually get is dictated by the choices we make. For the last few months I've been addressing the choices in front of us, economically speaking. Today I'm going to summarize them, and maybe we can look for some signposts that will tell us which path we're headed down. For those who are new readers and who would like a more in-depth analysis, you can go to the archives at and search for terms I'm writing about. And I will start out by briefly touching on today's ugly unemployment numbers, with data you didn't get in the mainstream media.

The Ugly Unemployment Numbers

The headlines said unemployment, as measured by the "establishment survey," was down by 190,000; and even though that was slightly worse than forecast, market bulls were cheered by the fact that the number wasn't as bad as last month's. It's an improvement that we're not falling as fast.

Well, maybe. What I didn't see in many of the stories I read was that the number of unemployed actually soared by 558,000 to 15.7 million, as measured by the household survey. The establishment survey polls larger businesses; the household survey actually calls individual households.

Let's look at the real number in the establishment survey. If you don't seasonally adjust the number, the actual change in unemployment for October was 641,000, or about 450,000 more than the seasonally adjusted number. And the Bureau of Labor Statistics added 86,000 jobs that they simply guess were created through the so-called birth-death ratio. Interestingly, the birth-death ratio number isn't seasonally adjusted, so it's just added to the unemployment number.

The total (U-6) employment rate is at a record high of 17.5% (this includes those who are part-time for economic reasons). There are now over 10.5 million people who have lost their jobs since the beginning of the downturn.

My favorite slicer and dicer of data, Greg Weldon, offers up an even more horrific number. As I've noted before, if you haven't looked for work in the last four weeks, the BLS doesn't count you as unemployed. Quoting Greg:

Moreover, when we combine the monthly change in the number of Unemployed, with the number Not in the Labor Force, we might consider the result to be a proxy for the actual "change" in the underlying labor market situation ... in which case, October's figure of 817,000 represents the fourth LARGEST yet, behind last month's (September's) second largest figure of 1,021,000 ... for a two-month combined figure of 1.838 million, in newly Unemployed, or no longer "in" the Labor Force ...

... the second LARGEST two-month total EVER posted, barely trailing the December-08/January-09 total 1.955 million.

Bottom line ... basis this measure AND the "Total Unemployment Rate," we could conclude that not only is there NO 'improvement' in the labor market, but moreover, that it continues to DETERIORATE, intently.

There are plenty more implications in the data, but let's turn to the topic of the day.

No positions in stocks mentioned.

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