Refined Projections For Unemployment

Refined Projections for both U series unemployment and for (Total Nonfarm Employees, referred to as TNF in my analysis), the jobs number reported when you hear X number of jobs were lost). Depression is indeed baked into the cake! When you look at this, remember that this scenario is based on bernanke’s recent comments that the economy should turn around in the summer, and also that they march and April 09 numbers used for my projections are preliminary numbers and tend to be revised upwards, which would only make things look worse. I took the Total Non Farm Employee data ( the number you hear when job loss numbers are announced) and charted out the last several recession (Figure A). I then created a scenario where the economy begins to turn around in August, meaning that job losses slow and begin to recede. I assumed that the period of time it took to fall is approximately how long it will take to return to positive growth based on most recessions being somewhat symmetric (data in Figure B). I then plotted a few other charts. The rate of job loss for each recession (Figure C), Total Non Farm Employees (Figure D), and I then converted the TNF data to U3/U6 using the method I described in the last projection paper I sent you. (Figure E). Note: the blue shaded regions are previous recessions SA = Seasonally Adjusted NSA = Not Seasonally Adjusted TNF = Total Non Farm Employees Figure A TNF SA (thousands of employees) 150,000 140,000 130,000 120,000 110,000 100,000 90,000 80,000 70,000 72

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Figure B Recession Comparison

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29

1974 -0.5% -1.1% -1.8% -2.2% -2.4% -2.4% -2.6% -2.4% -1.9% -1.7% -1.4% -0.8%

1981 -0.1% -0.6% -0.6% -0.9% -1.3% -1.3% -1.8% -2.2% -2.4% -2.5% -2.7% -2.6% -2.4% -1.8% -1.9% -1.5% -0.9% -0.5%

1991 -0.1% -0.6% -1.0% -1.2% -1.4% -1.5% -1.4% -1.2% -1.1% -1.0% -0.9% -0.8% -0.7% -0.4% -0.2%

2001 -0.1% -0.1% -0.4% -0.7% -1.1% -1.4% -1.4% -1.5% -1.5% -1.4% -1.3% -1.3% -1.3% -1.2% -1.0% -0.6% -0.4% -0.4% -0.3% -0.3% -0.4% -0.4% -0.4% -0.4% -0.3% -0.3% -0.2% -0.1% -0.1%

Employment #'s (TNF, NSA) 2008 -0.1% -0.2% -0.2% -0.4% -0.7% -0.9% -1.6% -2.1% -2.6% -3.1% -3.6% -3.8% -3.7% -3.6% -3.8% -3.8% -3.6% -3.1% -2.6% -2.1% -1.6% -0.9% -0.7% -0.4% -0.4% -0.3% -0.3% -0.2% -0.1%

May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10

138190 138451 137050 137002 137119 137492 136882 135917 132302 132138 132054 132295 127400 122814 118128 113620 109563 106174 103409 101206 99600 98671 98008 97662 97317 97010 96704 96478 96418

Δ 647 261 -1401 -48 117 373 -610 -965 -3615 -164 -84 241 -4895 -4586 -4686 -4507 -4057 -3389 -2765 -2203 -1607 -929 -663 -346 -345 -307 -306 -225 -61

%Δ -0.1% -0.2% -0.2% -0.4% -0.7% -0.9% -1.6% -2.1% -2.6% -3.1% -3.6% -3.8% -3.7% -3.6% -3.8% -3.8% -3.6% -3.1% -2.6% -2.1% -1.6% -0.9% -0.7% -0.4% -0.4% -0.3% -0.3% -0.2% -0.1%

U3

Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10

U Series Conversion (w/ U3 U6

U6

0.04%)

(w/ 0.06%)

(w/ 0.04%)

(w/ 0.06%)

8.5% 8.9% 10.0% 11.1% 12.1% 13.1% 14.1% 14.8% 15.5% 16.0% 16.3% 16.5% 16.7% 16.8% 16.8% 16.9% 17.0% 17.0% 17.0%

8.5% 8.9% 10.6% 12.1% 13.7% 15.3% 16.6% 17.8% 18.7% 19.5% 20.0% 20.3% 20.5% 20.7% 20.8% 20.9% 21.0% 21.1% 21.1%

15.6% 15.8% 17.76% 19.59% 21.47% 23.27% 24.89% 26.25% 27.35% 28.24% 28.88% 29.25% 29.51% 29.65% 29.79% 29.91% 30.04% 30.13% 30.15%

15.60% 15.80% 18.74% 21.49% 24.30% 27.00% 29.44% 31.47% 33.13% 34.45% 35.42% 35.97% 36.37% 36.58% 36.79% 36.97% 37.15% 37.29% 37.33%

Figure C Months 0 2

Depth of Recession 4

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0%

-1%

1974

-2%

1981 1991 -3%

2001 2008 2008 Projection

-4%

Figure D TNF SA (thousands of employees) 150,000 140,000

NSA TNF Employment

130,000

NSA TNF Employment Projection

120,000 110,000 100,000 90,000 80,000 70,000 72

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Figure E U Series Projections 40% U3 (SA) Low Projection 35%

U3 (SA) High Projection U6 (SA) Low Projection

30%

U6 (SA)

25%

U6 (SA) High Projection

20%

U3 (SA)

15% 10% 5% 0% 94

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Figure F U Series Proections 40% U6 (SA) Low Projection

35%

U6 (SA) U6 (SA) High Projection

30% 25% 20% 15% 10% 5% 0% 72

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