The Passing of Billy Mays Will Boost My Personal Saving Rate
This is meant as no disrespect to the family of Billy Mays. Rather, it is intended as utmost admiration of the man. My house and garage are full of the products – almost two of each product – that Billy Mays advertised on basic cable television. He was one of the best salespersons I have ever seen. I would purchase almost anything Billy Mays was selling. With his passing, my personal saving rate is bound to rise and I suspect the saving rate of many other Americans’ will also for the same reason. Although this will hurt retail sales, it will help business capital spending as we purchase more corporate bonds rather than Mighty Mendit tape. (By the way, I suspect that Mighty Mendit would be great to repair tears in a spinnaker. And if you order now, you might get two kits for the price of one. Just pay the extra shipping and handling fee.) Billy, may you rest in peace.
June Employment Report – More on the Jobless Rate
My inbox had a few emails about the jobless rate after our comments for the June report were published on Thursday, July 2. Noteworthy details of the response are repeated here. The civilian unemployment rate rose to 9.5% in June, 5.1 percentage points higher than the cycle low of 4.4% registered in March 2007.
What is source of data used in the computation of the unemployment rate?
The unemployment rate is computed based on a monthly survey called The Current Population Survey (CPS). It is a survey of 60,000 households conducted each month by the Bureau of Census for the Bureau of Labor Statistics.
Does the unemployment rate lead or lag the pace of economic activity?
It is a lagging economic indicator, which peaks after the end of a recession (see chart 1). Therefore, given projections of continued declines in growth of real GDP in the second and third quarters of 2009, the unemployment rate has not peaked as yet. The unemployment rate is most likely to peak in mid-2010.
What is the historical high for the unemployment rate in the post-war period?
The unemployment rate was at a historical high of 10.8% during November-December 1982. The 1981-1982 recession was preceded by a mini-recession from January 1980-July 1980. The 5.6% cycle low of the jobless rate in May 1979 is probably the more appropriate choice versus the 7.2% jobless rate in July 1980 to compute the percentage point increase from the cycle low to the cycle high of the jobless rate in this period. Based on this reasoning, the jobless rate increased 5.2 percentage points in the recessions of the 1980s.
What was the high of the unemployment rate in the Great Depression?
The civilian unemployment rate was around 25% during several months of 1932-1933 (see chart 2).
