The Real Misery Index: Unemployment Increases The Hardship

The rise in unemployment continues to prolong the hardship for millions of Americans, according to the latest update of the Huffington Post's Real Misery Index.

The index rose to 32.2 in August 2009, after peaking at 29.2 in July, largely due to the increase in the U6 unemployment rate, which tracks part-time workers looking for full-time employment and those who've given up looking for work. The index would be even higher if it weren't for a slight rebound in housing prices.

Rising unemployment -- and the accompanying increase in the number of Americans who have been out of work for more than 6 months (5.4 million as of September) -- threatens to diminish the chances of a speedy recovery.

"We're not at the beginning, and we're not at the end," American Bankers Association chief economist James Chessen told the Huffington Post's Shahien Nasiripour. "We're stuck in the middle of this cycle, and it's painful. I think it's a matter of working through the problems. The loans that were made that are problems today are loans that were made years ago. So it really is a matter of working through a difficult environment.

"The biggest issue affecting lenders today is the unemployment rate. Because not only does that affect consumer lending directly, but it impacts business lending as those consumers just don't have the income to buy the goods they did before."

Former Fed chairman Alan Greenspan told ABC News last weekend that prolonged unemployment translates into lost skills for the economy as a whole. "And people who are out of work for very protracted periods of time lose their skills eventually."

To formulate our index, which provides a better snapshot of the economy than the often-criticized misery index (inflation added to unemployment), we used a more accurate unemployment statistic (the U6 formulation), with the inflation rate for three essentials (food and beverages, gas, medical costs), and year-over-year percent changes in credit card delinquencies, housing prices, food stamp participation, and home equity loan deficiencies. We gave equal weight to the broad unemployment numbers and the combination of the other seven metrics (with housing prices having an inverse relationship to the index).

 Real Misery Index

 Traditional Misery Index

Comments

[berrycooda]

i can see China laughing all the way to the bank with their yuen...

THE NEW AMERICA...­.MADE IN CHINA.....

[marijam]

Dell computer company is laying off 905 when it closes down its plant in Winston-Salem, NC. I don't know what those people are going to do since there are no jobs to replace those. The city gave Dell $300 million in concessions that Dell is going to have to give back. For a few weeks, before the announcement, I actually thought we might have a chance, finally, to sell our house. That will certainly never happen now, not once all those workers' homes end up in foreclosure because there are no jobs.

[Tiggerchick]

"It's a recession when your neighbor loses his job, it's a depression when you lose your job."

[Tim303]

Here's a good example of why we do, yes indeed, need a good healthy govt. The FDA--since W dropped the regulation ball children have been dying of e Coli.

[Tim303]

Mind you interest rates for the likes of you and me appear to be coming down. GMAC is now offering about 4.6% (I know cos I have a second mortgage).

[MyLIberalKos]

Everything but the little people have become too big to fail.

Everyday we pay the consequences of Reaganomics and neoconservative economics

good articles; http://iamned1.blogspot.com

80's: Arthur Laffer, MIlton Freidman, Greenspan, Alexander M. Haig, Jr, Donald T. Regan, James A. Baker 3rd,
Later: Robert Rubin, Bernanke, Paulson

[MyLIberalKos]

we need change

[Tiggerchick]

So a question to all of my "I still have my job and my house and the rest of you should quit your bellyaching" friends - Many, many of us have been out of work for not just over 6 months, not just over 12 months but climbing into 18 and 24 months. Let's say for the sake of argument that I had my three months of all living expenses saved - well, that's gone now. I look for a job every day, not just in my field, but ANY job - bussing tables, retail, answering phones, cleaning, you name it. Some days I use $3 of my last $9 before the next unemployment check to get one gallon of gas just to drive to a store where they're supposedly hiring. This is not whining - this is simply what life is for some of us. The house is already in foreclosure, no loan mod for us. So what would you have us do? You want us to just go hide in a corner and pretend we don't exist, don't you? What is your solution? Get a job - yeah, working on that. And when I reach the end of everything and am forced in bankruptcy then I'm just working the system, right?

[katieandtom]

i agree tigger. i really think the economy wont be getting better soon. our town is a BIG banking city. the midlevel execs and execs were cut 6 months ago. their gov benefits and severance packages are running out. they wont all be able to hold on. this economy is shocking.

you absolutely are not whining, i get it. when someone can post a true life experience and not just turn straight to mean ness and ugl iness, i respect you. thank you for sharing.

[BP1]

Hear, hear, Tiggerchick! I feel exactly the same way. I just passed the 16 month mark, and don't have many opportunities in the pipeline. I've been interviewing the entire time, and have been a finalist for at least a dozen positions, but haven't secured one yet. We haven't paid our mortgage in a year, and we're behind on almost everything else. My unemployment benefits just got cut in half because they average the past several quarters of income to determine your benefit amount. We are in a real CRISIS, the worst I've ever experienced since starting to work 20 years ago. I'm terrified of entering winter in New England without an adequate income.

I'm caught in a Catch-22: When I interview for jobs for which I'm qualified, I hear that people are interviewing "2 levels down", and I'm competing against VPs, SVPs, etc. When I interview for lower-level jobs, I'm told that I'm overqualified, that I'll be bored and won't stay. I'm trapped!

[MadAppraiser]

When 1,500 people interview for 1 employment position, MAINSTREAM AMERICA HAS LOST THE WAR OF ECONOMICS!!! Human Resources personnel are becoming angry with the number of interviews they conduct for employment openings. Federal spending programs are about to come around full circle on the faces of Washington politicians!!!

[MadAppraiser]

The Federal spending I refer to relates to stimulus packages (employment development), and bailout application effectiveness in terms of mainstream American outstanding debt resolution (credit card and real property) by mortgage lenders.

[Levonsky]

You can have guns or butter but not both.

[LHB58]

The floggings will continue until morale improves.

[OpposingViewpoint]

A correction is coming, you can almost see it, touch it, and indeed smell it. For me, it's long overdue. It's time we put this country on a corrective course. A course that serves the needs of all of us, not just an elite minority.
We the majority must once again govern ourselves, casting aside the divisive and bitter rhetoric from inside the self-enrichment zone in DC. We have failed ourselves. We have the responsibility as Americans, as guardians of the constitution, to not only demand change when it is needed, we have the shared responsibility to ensure that change is implemented. When it isn't, we must insist those responsible for the failure to implement the change are removed from office, party affiliations be damed.
Instead, we have chosen to become our own worse enemy, fighting with ourselves, left vs. right. Our struggle REALLY is a class struggle, us against them, the banksters and our political elite from both sides of the aisle. It's time MainStreet ceases this self-destructive BS and gets on with the business we all know needs to be done, and that is cleaning up the mess that exists inside the beltway. No longer can we allow the elite to divide us along party lines with their divisive rhetoric, pitting us against us, it is well past time "WE" begin to act in the best interests of "US". Yes, the correction is coming, it's coming soon and the elitist know it as well.

[ohiomark]

Ah, the "Misery Index". Obama is truly following in Jimmy Carter's footsteps.

[JoeBlough]

The "misery" started under the Bush/Cheney Admin., just like 9-11.

[ohiomark]

The "misery index" started under Carter.

[rain33]

ok i agree with you too.

[PharmaMan]

Citizens of America we are all in trouble..…­.. DemoDon’ts & RepubliCan’ts.

[Stuzzadelic]

Apparently there's only about 20 years of industrial civilization left. After that the USA is supposedly going to revert back to some kind of agrarian system. Like what the Roman Empire would have been if it hadn't fallen.

[nomo555]

Misery. Just wait till next April when everyone trying to get by on unemployment benefits will have to try to pay Fed Income Taxes on those benefits.

[Carsy]

How about let's all be happy for what we have and live within our means.

[patrickhenrypress]

We can't exactly live within our means when rents are so high, salaries are so low, and good-paying jobs are disappearing. You must have noticed the increasing homelessness and despair (unless you are in banking or are a member of the Bush family, in which case you don't understand the issue and can just ignore the "little people" whose problems disturb your "beautiful mind").

[katieandtom]

patrick, you do know its true. a whole lot of people bought a lot of stuff they couldnt afford. they overextended.

im not saying this is everyones case and im not saying that im secretly happy they are losing everything. it is sad and horrible. hopefully, a lesson will come out of this and it will be one that we can pass on to our children - save for a rainy day. live modestly. save for the future or invest. and help your neighbor.

[Carsy]

My parents bought their first house not even 40 yrs ago and they furnished the entire house with second hand furniture for $200. Those were the days when the middle class was strong and didn't worry about "keeping up with the Jones" sort of speak. Have any of you ever watched those home buying shows on HGTV? These are first time home buyers in their 20s that want stainless steel appliances, granite countertops and a fireplace to hang their 60" plasma over it.
I am sorry Patrick if my comment has offended you. I am not some elistist, " shut up and get a job" person. There are a lot of people that have gotten majorly screwed over, that upsets me to no end, but there are a lot of people as well that just had to keep up their neighbors with useless consumer s***. Credit card debt, most of which is stuff that was wanted buy not needed is what have crippled the country.

[katieandtom]

h*ell to the yeah carsy - fanned.

[kesmarn]

The problem is some folks have no means.

[Humanistic]

You mean, go live in a homeless shelter? But they're all filled up!

[carbolaw]

Exactly what has been trumpeted by the 1% of Americans that have continued to increase their wealth over the past 30 years, while the rest have suffered. "Don't demand a raise, or organize to increase your bargaining power, times are tough for our multi-billion dollar corporation, just learn to cut some corners, tighten your belts." (not much different than "let them eat cake"). While this is preached from those at the top, and so many working class Americans buy into it, those at the top accumulate more and more wealth and live more and more lavish lifestyles off of the blood, sweat and tears of the rest of us. The problems with our economy could be taken care of if the will was there to solve the problems. The solution rests with the working class of this country. Jobs -whether they be private or public - that pay a living wage must be created and some semblance of balance in wealth and income must be restored. Perhaps this means returning to a sensible estate tax so that silver spoon babies do not inherent millions of dollars tax free, perhaps it means returning to a hefty tax on as FDR stated excess profits of both individuals and corporation, but however it is funded, until there is a bottom up solution, there will never be a true recovery.

[MCTSilverlakeCA]

Ever wonder why no one shed any tears when the Titanic sank and took down with it over 300 of the country's richest men....?

Now they've sunk the Public along with them... oops... no... THEY took the Lifeboats.­.. and left the rest of us to drown... .