Unemployment August 2008

12.07pm GMT

Okay, time for the official release countdown again.

Today's release is the August 2008 unemployment report. It will be released at 12.30pm GMT (08.30 Eastern Time). Click here for the page you can download it from. I'll post a direct link as soon as it is available.

The July 2008 rate was 5.7%. This was an increase from June's 5.5%. Bloomberg's survey of experts predict that while the number of unemployed will grow, the rate itself will remain unchanged at 5.7% seasonally adjusted.

Of course, being the pessimist I am, I think it will be higher.

For starters, there was a large financial stimulus that congress sent out in June. This was reflected in the GDP figures for the period. Despite all that money, unemployment increased from 5.5% in June to 5.7% in July. I think much of that stimulus got eaten up by paying back bills rather than buying anything. Add to this the contraction in M3 that Mish has been talking about and I think we'll see a worsening employment situation.

The high forecast from Bloomberg is 5.9%. I think that the chances are that an increase to 5.8, 5.9 or 6.0% is likely to be the case. A 50 basis point rise a few months ago saw the rate go from 5.0 to 5.5% in one hit, so it is possible that a 6.2% figure could result. Anything about that and the markets will tank again.

But, knowing the amount of eggs already on my face, I can imagine it going down to 5.3% or something stupid like that.

So, in short, 5.8-6.0% is my guess with 6.1% or 6.2% a pessimistic possibility. I'll probably get it wrong, but at least I don't pretend to be perfect!

6.1% It's bad. Download it here.

U-6 - the "worst" unemployment rate (and the one they used to measure unemployment during the great depression) rose to 10.7%.

I posted something before that was inaccurate (misread the release). I've been checking this release and comparing it to June's and the biggest sector hit by unemployment has been transport.

In A.10 (page 17), near the bottom of the table there is a section about the transport industry. I'll just copy it over here with July's and August's figures:

Production, transportation, and material moving
occupations....................................................................... 7.2% (July) 7.6% (August)

Production occupations................................................... 7.1% (July) 8.0% (August)

Transport and material moving occupations................. 7.4% (July) 7.3% (August)

A.11 (page 18) has some less sensational data for the transport industry, indicating that "Transportation and utilities" fell from 5.7% to 5.2%. I guess there's some crossover occurring and the two sets of data might not refer to the same thing.

However A.11 does point out that people employed in the "financial activities" sector of the economy went from 3.6% to 4.2%.

"Professional and Business services" went from 6.1% to 6.9%. That's a biggie.

Mining unemployment went from 1.5% to 1.9%. Interesting considering the commodities boom.

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