Bursting housing bubble: Yes
The credit crunch- housing related: Yes
Recent financial market turmoil: Not yet

The errors might add 100K plus to each of the labor force and employment numbers and reduce the reduction in unemployment.

And btw, Robert Reich seems to have a new book out advocating (if I understand correctly from the article I read) getting rid of corporate taxes as tradeoff for their rights as citizens. Any comments?

-A-

Btw, Mish had some good points on the massive layoffs too.

-A-

A note on payroll indicated errors.

“The labor force participation rate decreased to 65.8 percent in August, largely reflecting a decline in participation among teens. The labor force participation rate of teenagers declined by 1.5 percentage points to 39.7 percent. The household survey reference period fell
relatively late this August (covering the week from Sunday,
August 12 through Saturday, August 18) and, as a result, a larger-than-usual number of teens had left the labor force to return to school when surveyed. While the movement in August may have been exaggerated by the timing of the survey week, the labor force participation rate of teenagers had
been declining recently–from 43.4 percent in December 2006 to 41.2 percent in July 2007.”

How has the late survey impacted numbers? Well they indicate it may exaggerate the decline in teen employment.

The unadjusted fall in teen workers in August is -910k the largest in a decade except 2001.

This translates to a seasonally adjusted fall of -275k the largest in a decade again apart from a blowout -428K in 2001.

How about teen participation rates? Here the indicated potential error would lower the participation rate.

The unadjusted fall in teen participation July-August is -6.6%, average for the decade.

But the adjusted fall is -1.5% the largest in a decade (double the next largest)apart from a blowout -2.5% in 2001.

These acknowedged potential errors have not been corrected for in the published seasonal adjustments.

Given the large survey error +/-500K and the small result -4K

I agree with your observation. It’s a much better measure and use of it would force more discussion of why the non-working population isn’t working.

The word “economists” covers a lot of people. The profession has become very specialized. From what I can see, labor economists look mainly at policy issues, like the impact on employment of minimum wages. And frankly, I think their research is only selectively read by the mainstream press.

So in my view, the real issue is the reporting by the financial press, plus Wall Street and other analysts. And unfortunately, governments all around the world publish unemployment stats. They are easy to find, and most governments define employment pretty consistently (how they define the pool of labor is more variable).

So most people, including people who should know better, think the unemployment stats are pretty valid. Recall some of the comments on the post you mentioned earlier, where some people vigorously attacked questioning of the unemployment figures, and specifically, the notion that our unemployment rate might actually be comparable to Europe’s. One writer actually got emotional about it

If you believe our unemployment levels are in the ballpark of Europe’s it says our Darwinian “employment at will” approach to workers might not be justified. It creates a lot of job losses and stress on families, yet the supposed benefits of higher production (and thus in the end higher employment) might not be there.

That’s as close as you get to a religious issue in the world of commerce.

Any idea?

I wrote on wikipedia unemployment article a while ago:

For the fourth quarter of 2004, according to OECD, (source Employment Outlook 2005 ISBN 92-64-01045-9), normalized unemployment for men aged 25 to 54 was 4.6% in the USA and 7.4% in France. At the same time and for the same population the employment rate (number of workers divided by population) was 86.3% in the USA and 86.7% in France.

This example shows that the unemployment rate is 60% higher in France than in the USA, yet more people in this demographic are working in France than in the USA, which is counterintuitive if it is expected that the unemployment rate reflects the health of the labor market [10].