by Calculated Risk on 9/07/2009 09:50:00 AM

From Michael Luo at the NY Times: Out of Work, Too Down to Search On, and Uncounted (ht Kai, Ann)

They were left out of the latest unemployment rate, as they are every month: millions of hidden casualties of the Great Recession who are not counted in the rate because they have stopped looking for work.

But that does not mean these discouraged Americans do not want to be employed. As interviews with several of them demonstrate, many desperately long for a job, but their inability to find one has made them perhaps the ultimate embodiment of pessimism as this recession wears on.
...
The official jobless rate, which garners the bulk of attention from politicians and the public, was reported on Friday to have risen to 9.7 percent in August. But to be included in that measure, which is calculated by the Bureau of Labor Statistics from a monthly nationwide survey, a worker must have actively looked for a job at some point in the preceding four weeks.

For an increasing number of people in this country who would prefer to be working, that is not the case.

Luo provides short stories about four people who have given up looking.

by Calculated Risk on 9/06/2009 08:34:00 PM

Laura Conaway at NPR Money highlights a new survey by the Rutgers University John J. Heldrich Center for Workforce Development.

From the Press Release:

A comprehensive national survey conducted among 1,200 Americans nationwide who have been unemployed and looking for a job in the past 12 months, including 894 who are still jobless, portrays a shaken, traumatized people coping with serious financial and psychological effects from an economic downturn of epic proportion.
...
The survey shows that the great recession of 2007-2009 may have long-lasting financial and psychological effects on millions of people, and therefore on the nation’s social fabric. Two thirds of respondents say they are depressed, over half have borrowed money from friends or relatives, and a quarter have skipped mortgage or rent payments. ...

More than half of the jobless think the changes in the economy will be fundamental and lasting, and when the unemployed are asked when the economy will recover, only 20% believe it will do so in the next year.

Here are the raw comments and stats from the survey.

Click on graph for larger image in new window.

From the report:

Over half of the unemployed have lost their jobs for the first time ... Job loss is hitting more affluent workers and educated professionals hard — a metric of the recession’s seismic impact. More than one in four of those who were unemployed for the first time earned $75,000 or more in their previous job; one in four first-time unemployed workers have at least a four-year college degree.

by Calculated Risk on 9/06/2009 02:00:00 PM

A few posts of interest this last week:

Restaurants in July: 23rd Consecutive Month of Declining Traffic

Construction Spending in July

Light Vehicle Sales 14.1 Million (SAAR) in August

ISM Non-Manufacturing Index Shows Contraction in August

Problem Bank List (Unofficial) Sep 4, 2009 (5 more banks failed this week)

Employment Report: 216K Jobs Lost, 9.7% Unemployment Rate

Unemployment: Stress Tests, Unemployed over 26 Weeks, Diffusion Index

Employment-Population Ratio, Part Time Workers, Average Workweek

Enjoy the weekend!!! Best to all.

by Calculated Risk on 9/06/2009 11:00:00 AM

In the comments yesterday we were comparing the "feel" of the current recession compared to the early '80s. Back then it seemed there were many more homeless people, and camps of "Reaganvilles" (an echo of the Hoovervilles during Depression) were sprouting up around the country. I commented that it seems there are far fewer homeless people now, so this story caught my eye ...

From the NY Times: Surge in Homeless Children Strains School Districts

While current national data are not available, the number of schoolchildren in homeless families appears to have risen by 75 percent to 100 percent in many districts over the last two years, according to Barbara Duffield, policy director of the National Association for the Education of Homeless Children and Youth, an advocacy group.

There were 679,000 homeless students reported in 2006-7, a total that surpassed one million by last spring, Ms. Duffield said.

With schools just returning to session, initial reports point to further rises. In San Antonio, for example, the district has enrolled 1,000 homeless students in the first two weeks of school, twice as many as at the same point last year.

by Calculated Risk on 9/06/2009 08:00:00 AM

From the WSJ: G-20 Agree to Boost Banks' Capital Requirements, Set Rules on Bonuses

The agreement on bankers' pay calls for a large portion of bonuses to be clawed back if bank performance subsequently deteriorates. It also calls for the deferral of a share of bonuses. ... More detailed proposals will be worked on in coming weeks by the Financial Stability Board ... Officials want the new rules in place before bonuses are paid out at year-end.

And on capital requirements:

... the officials [agreed] that more needs to be done to boost banks' capital cushions "once recovery is assured." ...

In a victory for Mr. Geithner ... there was also agreement that the leverage of international banks – the ratio of their total equity to their total assets -- should be capped. ... Officials fear that if the capital is not raised, undercapitalized 'zombie banks' would be unable to lend and would block economic recovery.

Here is the Communiqué - UK, 5 September 2009 (PDF 13KB)

And Declaration on further steps to strengthen the financial system, 5 September 2009 (PDF 15.5KB)