When Numbers (Sorta) Lie

Dear Rundown Reader,

Your views on unemployment stats:

“The unemployment rate is very low but that only counts people in the labor force that are looking for work.

“The labor force participation rate reached historic lows during the Obama administration.

“There are still millions of able bodied people on the sidelines who could rejoin the workforce so the unemployment rate could remain steady while more jobs are created.”

Starting in 1994, the Bureau of Labor Statistics started releasing two sets of unemployment numbers.

The U3 number accounts for workers without jobs who are currently in the labor market, meaning they’ve looked for a job in the last four weeks. This stat’s most widely reported by the media.

The U6 number includes underemployed, marginally attached and discouraged workers.

Underemployed workers are those working part-time who’d prefer full-time jobs. The marginally attached have looked for work in the past year but not in the last four weeks. Discouraged workers haven’t looked for work in the past year.

The stat we cited Friday is the U3 number for August: 3.9%. The U6 number is 7.4%.

We still think these numbers are fair comparisons to 2000. Like today, the U3 number was 3.9% in Dec. 2000 and the U6 number was 7.1%

If history repeats or at least rhymes, then we’d do well to remember what happened in 2001.

Do you think unemployment stats are good indicators of a recession? If not, what sounds the alarm for you?

Thanks for the feedback. We look forward to hearing from you.

Your Rundown for Mon. September 17, 2018…

Migration Patterns

Real estate analysts at Redfin say, “Taxes are three-times lower in the top-10 migration destinations than in the 10 places people are most commonly leaving.”

Not surprising.

Americans won’t be able to write off 2018 State and Local Taxes (SALT) above the new tax code’s $10,000 cap. That’s prompting more Americans to pull up stakes.

If you’re looking to move, here are some of the highest and lowest-taxed states:

Local Tax

Again, not surprising. San Francisco, New York and Los Angeles were the top three U.S. cities that experienced more people moving out than moving in during the second quarter of 2018.

  • San Francisco: 27,849 net outflow
  • New York: 23,559 net outflow
  • Los Angeles: 13,370 net outlow

The top out-of-state destinations for people in the above cities were Seattle, Boston and Phoenix respectively. Boston, a high-tax city itself, is an outlier compared to low-tax Seattle and Phoenix.

Of course, if you’re living in the highest-taxed city in the country — NYC — Boston might look like a tax haven.

“The trend of people leaving high-tax states for low-tax ones has been underway since 2010 and is accelerating,” Redfin says.

We expect the new tax code won’t be putting the breaks on this trend anytime soon.

Market Rundown for Mon. September 17, 2018

S&P 500 futures are in the red by about 6 points to 2,898.62.

Oil’s going for $69.52 a barrel, up roughly 50 cents.

Gold added $7 to its price of $1,208.20.

Bitcoin sits at $6,363.75; that’s down $137.

Have a great day. We’ll talk tomorrow.

For the Rundown,

Aaron Gentzler

Aaron Gentzler

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Aaron Gentzler

Aaron Gentzler is the publisher of Seven Figure Publishing. He is also the editor of The Rundown and has been with Agora Financial / Seven Figure Publishing since 2005. He's been covering technology and markets for over a decade.

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