Buried Ledes

Sat, Apr 2, 2011


I tweeted yesterday (@volatilitytrade) about how the Wall Street Journal buried the lede on the March unemployment numbers (“Hiring Shows Growing Strength”—since removed), and now The New York Times has followed suit, with the headline “Job Growth Suggests Resilience of U.S. Recovery”.

In the seventh paragraph, we find the following:

Yet March’s numbers also offered more than a few cautionary signs that the national economy was not cured of all its ills. The ranks of Americans who have been without a job for 27 weeks or more remain painfully high, at more than six million. And the labor force has shrunk steadily since the beginning of the recession, to a point that just 64.2 percent of adults are either in the work force or looking for a job. That is the lowest labor participation rate in a quarter-century.

“The lowest labor participation rate in a quarter-century.” And that’s not the headline? I believe we’ll ultimately get through this job slump as much as the next red-blooded American, but a macroeconomic blip gives the market a 0.5% goose? Hmmm.

Here’s a quick look at the unemployment picture in “unofficial” terms. The U3 (official number) has gone down a tiny fraction of the 2008–2010 run-up. U6, which includes “underemployed” but not “discouraged” workers (people out of work for more than six months) is down to…um, 16%. ShadowStats’ “Alternate” unemployment charts, which include “discouraged”workers, show total unemployment still in the vicinity of 22%.

Sure, people would like to see encouraging signs that the jobs picture is turning around. But with more than a fifth of the population out of work, I’d feel better informed if the headline writers weren’t always so quick to go with the rosiest possible scenario.

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Jared Woodard specializes in trading volatility as an asset class. With over a decade of experience trading options and other volatility products ... Read More


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