Deutsche Bank: Here's Why Unemployment Has Been So Sticky And Why That's About To Change


Photo: Deutsche Bank

Deutsche Bank economists were caught out last Friday in their bullish call on U.S. employment data, with the surprise higher number.Deutsche Bank were calling for a 0.2% fall in unemployment in November when we actually saw a rise to 9.8%.

But things are yet again about to change, because tax receipts suggest more people are employed than unemployment data does.

That doesn’t mean Deutsche Bank is as bullish as it was before: the bank has revised its unemployment projections, calling for a fall to 8.8% in 2011, rather than 8.0%.

This cycle has had a stickier unemployment rate than usual (partially due to a lack of consumer spending and the hampered real estate industry). Deutsche Bank have raised their unemployment outlook for 2011 to 8.8%, from 8.0%.

Wages and salaries are being increased in revisions, which indicates hiring and employment might be higher than expected.

In November, tax receipts rose 7%, faster than at any time between 2001 and 2007. This indicates incomes are rising, which could suggest employment is up.

Just because it appears to be a jobless recovery, doesn't mean it is.

Still reeling over last Friday's jobs report?

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