Powell Calculation
I discussed Powell’s adjusted unemployment rate on March 2, in How Did the Fed Conclude the Real Unemployment Rate Was 10% in January?
As you can see, I came up with nearly the same chart via the methodology described in the above link.
Private Payroll Rise a Whopping 465,000
Earlier today I noted Private Payroll Rise a Whopping 465,000
The BLS put the official unemployment rate at 6.2% whereas the labor-force adjusted unemployment rate is 10.0%.
Labor Force and Projected Labor Force
The Wall Street Journal comments Better Job Market Not Nearly Good Enough for the Fed.
Given Powell’s repeated comments regarding the labor force, I certainly agree.
By my calculation, the labor force is 5.8 million below the number Powell seeks, and 4.2 million below the February 2020 pre-Covid labor force of 164.4 million.
The labor force is a moving target. It has been on a steady increase at the same average monthly rate since the beginning of 2016.
I believe Powell used a similar methodology or the charts would not align as much as they do.
Fed Hubris
Although I agree with Powell that the unemployment rate is hugely understated, I disagree strongly with the Fed’s approach to deal with it.
For discussion, please see Fed Hubris: Housing Prices Show the Fed is Making the Same Inflation Mistake
Mish
I kept reading about how there was an exodus from California but I noticed traffic was as bad it has ever been when I would drive around the bay area last year. Now I know why. In San Francisco proper i noticed less traffic and fewer people. Now the data backs up what I observed.
Not that I think you will take this as a compliment Mish, but Janet Yellen just said the same thing on the PBS Newshour about 15 minutes ago. So, is this a case of her being like a stopped clock; right twice a day? Or, is it back to the math lab for you to find your error, because the idea that you would agree with anything Yellen says is sort of really funny.
Mike, I just refinanced my 30 year fixed rate VA mortgage in January at 2.25% and was kicking myself by the end of the month when I had offers at 1.75%. Now that rates are back over 3% I am pretty okay with two and a quarter.
Houses in this region are experiencing huge price increases, the house 4 doors down was on the market for years, priced at $359,900 was considered almost 100k over the market and hopeless pricing. It just sold for $389k and everyone around here is just in shock, it doesn’t even have a pool.
I paid $257k last April and it is looking like I could easily get $359 right now. This is greater Tampa.
I may have to also because my legs have grown so progressively weak so fast I don’t think I can stay independent much longer. If I have to go to assisted living I will return to Oregon where Medicare covers that. One of the few places that does.
Finally we see people who were part of the Trump admin were actually the rioters. It will be interesting to see the chain of command called to testify soon and see why they did not call the national guard.