Smiling Faces Sometimes

Regular readers know that the "job watch" numbers are no longer credible.

When I first started blogging, the magic number of "new jobs needed" each month to keep unemployment "level" was 200,000. Then it moved to 150,000. And then 125,000 -- see link.

Now, this. This is absolutely incredible, validates exactly what I've been saying for the past year or so. Yahoo!Finance is reporting:

Conventional wisdom usually dies hard, but one long-held axiom relating to unemployment may be ready for the graveyard.

For years, economists have accepted 150,000 as the benchmark number of new jobs needed every month to keep the jobless rate level. Anything above that was supposed to lower the rate, while anything below added to the closely followed headline number.
Not so anymore, according to the Chicago branch of the Federal Reserve.

Central bank researchers, in fact, say that because of various factors that number now will be closer to 80,000.

 Moreover, a paper the Fed recently released on the issue maintains that the number will continue to fall, and at a fairly rapid pace, all the way down to 35,000 by 2016.

Note where this is coming from: the Obama Chicago branch of the Federal Reserve.

The facts are these: adding jobs at the rate of 150,000/month will get us back to an unemployment rate of 6.5% in a decade. And 6.5% is well above the benchmark 4% that is considered full employment.

So, now we have the new number: 35,000. Starting in 2016, if we add 35,000 jobs/month, the unemployment number will remain stable. LOL. Just a year ago we had to add 200,000 jobs/month -- now we're being told that we can start thinking about 35,000/month. 

By the way, the fallacy in the new projection: the Obama Chicago branch of the Federal Reserve does not include the 30 million new citizens within ten years after the immigration bill is signed (see linked article: see if you can find any reference to the 30 million new citizens).

For now, I'm not changing my numbers. Someone has to remain consistent. 

The undisputed truth:

Smiling Faces Sometimes, The Undisputed Truth