The Unemployment Rate is Below 5% in 15 States. Where Does Your State Rank?

Below is the unemployment rate in each state.  Currently, North Dakota has the lowest unemployment rate at 2.8% (thanks to the oil boom) and Georgia has the highest at 7.9%.

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State	Sep 2013	Aug 2014	Sep 2014
Alabama	6.4%	6.9%	6.6%
Alaska	6.6%	6.8%	6.8%
Arizona	8%	7.1%	6.9%
Arkansas	7.7%	6.3%	6.2%
California	8.8%	7.4%	7.3%
Colorado	6.6%	5.1%	4.7%
Connecticut	7.7%	6.6%	6.4%
Delaware	6.6%	6.5%	6.5%
District of Columbia	8.2%	7.7%	7.7%
Florida	6.9%	6.3%	6.1%
Georgia	8%	8.1%	7.9%
Hawaii	4.7%	4.3%	4.2%
Idaho	6%	4.7%	4.5%
Illinois	9.1%	6.7%	6.6%
Indiana	7.3%	5.8%	5.7%
Iowa	4.5%	4.5%	4.6%
Kansas	5.3%	4.9%	4.8%
Kentucky	8.3%	7.1%	6.7%
Louisiana	6%	5.8%	6%
Maine	6.6%	5.6%	5.8%
Maryland	6.5%	6.4%	6.3%
Massachusetts	7.2%	5.8%	6%
Michigan	8.8%	7.4%	7.2%
Minnesota	4.9%	4.3%	4.1%
Mississippi	8.4%	7.9%	7.7%
Missouri	6.4%	6.3%	6.3%
Montana	5.6%	4.7%	4.6%
Nebraska	3.9%	3.6%	3.6%
Nevada	9.6%	7.6%	7.3%
New Hampshire	5.2%	4.4%	4.3%
New Jersey	7.9%	6.6%	6.5%
New Mexico	6.9%	6.7%	6.6%
New York	7.5%	6.4%	6.2%
North Carolina	7.7%	6.8%	6.7%
North Dakota	2.8%	2.8%	2.8%
Ohio	7.4%	5.7%	5.6%
Oklahoma	5.6%	4.7%	4.7%
Oregon	7.6%	7.1%	7.1%
Pennsylvania	7.3%	5.8%	5.7%
Rhode Island	9.5%	7.6%	7.6%
South Carolina	7.3%	6.3%	6.6%
South Dakota	3.7%	3.5%	3.4%
Tennessee	8.2%	7.4%	7.3%
Texas	6.3%	5.3%	5.2%
Utah	4.3%	3.5%	3.5%
Vermont	4.5%	4.1%	4.4%
Virginia	5.5%	5.5%	5.5%
Washington	6.9%	5.6%	5.7%
West Virginia	6.4%	6.6%	6.6%
Wisconsin	6.6%	5.7%	5.5%
Wyoming	4.6%	4.6%	4.7%

(via WSJ)

Getting in the Middle of an MMT Debate

As I have said before, I am going to pick my spots debating MMTers. There really is too much MMT stuff out there with moving parts to address most of the dance. However, when a comment is made that seems to need to be corrected because of its numerous fallacies that could mislead many, I will jump in, and such a comment has occurred.

MMTers Pavlina R. Tcherneva and John Carney of CNBC are having a debate over the call by most MMTers for a Jobs Guarantee program. Carney is against such a program, which is good to see. However, he yields much too much to those in favor of JG.

He writes:

Since I've been one of the critics of the Job Guarantee, there are a few points I'd like to make in response to this.

1. I agree that (a) unemployment is a social evil, (b) it is a serious macroeconomic problem of capitalist economies, and (c) the private sector cannot deliver a long term solution. Our point of disagreement is not on whether the world is beset by evils but whether or not a state-created program--more specifically, the Job Guarantee--can eradicate the evils.

First, I don't see unemployment as a "social evil".

I personally do not believe I have anything to do with the current unemployment situation and I am certain most others are not responsible for the unemployment. Long-term unemployment is the result of two factors: minimum wage laws and unemployment "insurance" payments.

If minimum wage laws are above the marginal revenue product of a potential wage earner that person will not be employed. This is simple basic economics. An entrepreneur will not hire someone if the cost is greater than the revenue. Pretty simple stuff. Make the minimum wage (cost to an employer) high enough and you will have massive unemployment. Second, if a person is offered payment for not working, some may opt for this option. I see no other factor that can cause unemployment (outside of some very short-tern unemployment when a person searches for a new job)

There is no "social evil" in unemployment, just as there would be no social evil if the government passed a law that bananas could not be sold for less than $500 each. The resulting rotting of bananas is not because of some social evil but because of a very specific action taken by government, having nothing to do with most in society. Society suddenly didn't hate bananas. Government regulations distorted a market exchange.

Second, unemployment is not, as Carney states, a "serious macroeconomic problem of capitalist economies". We see clusters of unemployment in economies at times when a central bank exists and manipulates the money supply, which results in the boom-bust business cycle. But this has nothing to do with "capitalist economies" and everything to do with central banks. During the bust phase, sizable unemployment occurs because the economy is going through a readjustment phase following the distortions caused by central bank money manipulation during the boom phase. But even this unemployment would clear up fairly quickly, if allowed to do so. The unemployment tends to linger only as a result of the minimum wage laws and unemployment "insurance" payments which hinder the readjustment process from taking place.

In other words, such unemployment has nothing with capitalist economics, and everything to do with government interventions in a capitalist economy.

Finally, it is not the case that the "private sector cannot deliver a long term solution", but that through the government interventions of minimum wage laws and unemployment insurance payments, the private sector is limited from hiring individuals at the wages the market will allow.

In other words, free the markets will result in the unemployment "problem" disappearing, and we won't have to get so pensive over "social evils" that are in reality problems created by evil doings of government leaders.

The Slaying of the BLS 'Birthers'

Ed Yardeni has two important observations about the BLS 'birthers', who believe that any birth/death adjustment to the jobs number should be tossed out the BLS window. Most important is his note with regard to the birthers failure to properly make the seasonal adjustment.

The BLS has very antiquated data collection methods for their payroll employment numbers, but I don't believe this means that the BLS shouldn't take into account, in some fashion, business formations. Just know that it is a very rough number. Here's Yardeni:

The Birthers were quiet on Friday following the release of November’s payroll employment report. They usually get all hot and bothered about the so-called birth/death adjustment (BDA) to total payrolls. Whenever it is up, they claim that it is bogus and immediately subtract it from the total to demonstrate that the labor market is weaker than suggested by the headline employment number. They did that last month when the BDA added 102,000 to October’s payrolls, which showed a gain of 80,000 on a preliminary basis. November’s report showed that this adjustment reduced payrolls by 29,000. Yet the Birthers didn’t bray that the increase in payrolls must have been greater than the first-reported official estimate of 120,000.

The Birthers will be back as soon as the BDA is positive again, which won’t be long. The statistical model used by the Bureau of Labor Statistics (BLS) is “designed to reduce a primary source of non-sampling error which is the inability of the sample to capture, on a timely basis, employment growth generated by new business formations.” Even during 2008, 2009, and 2010 the BDA added 724,000, 477,000, and 288,000 to payrolls. By the way, that adjustment is added to the data before the total is seasonally adjusted. Yet the Birthers always make the serious mistake of comparing the seasonally unadjusted BDA to the seasonally adjusted total.

Rasmussen Employment Index

More confusion for the Keynesians, who have no understanding of the business cycle and thus no early clue as to when it is turning upward.

The Rasmussen Employment Index, which measures workers’ perceptions of the labor market each month, gained five points in November to reach 76.8. Says Rasmussen, generally speaking, an increase in the Rasmussen Employment Index suggests the upcoming government reports on job creation will be better than the prior month.

The index has been climbing for a few months now:

November 2011
76.8

October 2011
71.7

September 2011
73.4

August 2011
69.3

July 2011
70.1

Interventionist Policies and Youth Employment Don't Mix

50% of workers under 25 are unemployed in Spain and Greece. It's a combination of high minimum wage laws, the nanny state and regulations keeping youth from getting jobs---a truly sad situation.

Where the Unemployment Is

It is easy to fall into the trap of over-aggregating trends in the economy. When thinking about unemployment, many consider a downturn as a period when the entire economy is more or less impacted equally. Not so.

The reckless money printing that fuels a boom usually ends up in the capital goods sector first, thus when the Federal Reserve takes its foot off the money printing machine, even for a brief period, it is the capital goods sector that will experience the greatest number of layoffs and lost jobs.

Richard Ebeling has put the numbers together to show that the current readjustment period is no different. The heavy losses are where you would expect them to be, in the capital goods sector. Ebeling's full report is here.

Unemployment Climbs to 6.5%

New figures from the Labor Department show significant employment deterioration, with 240,000 jobs lost in October and major upward revisions in job-loss figures for August and September. The unemployment rate jumped to 6.5 percent, a 14-year high, from 6.1 percent in September.

Employment has fallen by 1.2 million in the first 10 months of 2008; over half of the decrease has occurred in the past 3 months. In October, as would be expected by those with an understansing of Business Cycle Theory, job losses continued in manufacturing, construction, and employment in financial activities declined by 24,000 in October and is down by 200,000 since its peak in December 2006. Over the month, employment contracted in both credit intermediation and related activities (-12,000) and in securities and investment firms (-6,000)... Health care and mining continued to add jobs.

The unemployment rates for adult men (6.3 percent), adult women (5.3 percent), whites (5.9 percent), and Hispanics (8.8 percent) rose in October. The jobless rates for teenagers (20.6 percent) and blacks (11.1 percent) were little changed. The unemployment rate for Asians in October was 3.8 percent, not seasonally adjusted.

Given that Bernanke is only increasing money supply at moderate rates, the unemployment rate should continue to climb for at least the short-term.

Negative Jobless Number

The number of U.S. workers filing new claims for jobless benefits declined by 6,000 last week, according to the Labor Department.

Initial claims for state unemployment insurance benefits dropped to a seasonally adjusted 445,000 during the week ended Sept. 6 from a revised 451,000 in the prior week.

However,the number of continued claims -- people remaining on benefit rolls after drawing an initial week of aid -- shot up by 122,000 to 3.53 million in the week ended Aug. 30, the latest period for which the data is available. That was the highest reading since October 2003.

-EPJ Newsdesk