Nouriel Roubini says the federal government has to be much more aggressive on the unemployment front:

There’s really just one hope for our leaders to turn things around: a bold prescription that increases the fiscal stimulus with another round of labor-intensive, shovel-ready infrastructure projects, helps fiscally strapped state and local governments and provides a temporary tax credit to the private sector to hire more workers. Helping the unemployed just by extending unemployment benefits is necessary not sufficient; it leads to persistent unemployment rather than job creation.

I’m sympathetic, but I’d note that the low-hanging fruit has already been picked, when it comes to “labor-intensive, shovel-ready infrastructure projects”, with the first stimulus, and I’m not sure that there are actually any left. Instead, might I suggest arts subsidies?

You remember Friday’s gruesome employment report, right? Floyd Norris has taken a second look at it, and found something quite surprising:

Unemployment rates remained steady at 9.5 percent. And the number of jobs actually rose, by 80,000. And the number of jobs for college-educated Americans rose more than in any month in the last six years.

That big hike in unemployment to 10.2%, and all the other terrible, horrible, no good, very bad jobs numbers turn out to have been entirely a function of the BLS’s seasonal adjustments. As Norris writes:

All this may be very reasonable, and there is no way I can think of to test whether the seasonal adjustments are reliable. But I suspect seasonal factors are less important this year, when the economy may be changing directions, than they normally are.

Now even the unadjusted numbers aren’t all sweetness and light, especially when it comes to those with less education. But it does make sense to think that seasonal factors aren’t going to be the same this year as they are in other years.

Another great chart from the people at nytimes.com: this one shows how unemployment has risen among various different segments of the population, since January 2007. Here’s what’s happened to the 12-month average employment rate for black men without a high-school degree under 25 years old:

Meanwhile, here’s the chart for white women ages 25 to 44 with a college degree:

Wow:

In October, the number of unemployed persons increased by 558,000 to 15.7 million. The unemployment rate rose by 0.4 percentage point to 10.2 percent, the highest rate since April 1983. Since the start of the recession in December 2007, the number of unemployed persons has risen by 8.2 million, and the unemployment rate has grown by 5.3 percentage points.

Well, at least give the BLS credit for not trying to sugar-coat the data. This is truly awful, and makes it obvious why the Fed will keep rates at or near zero for the foreseeable future. You just can’t raise rates when unemployment is in double digits.

The length of time the average unemployed person has been without a job has been hitting new record highs for a while; it’s now managed to pass the 6-month mark. That’s much higher than any previous peak in this data series. And I fear that the only way it’s likely to come down any time soon is as these people become so demoralized that they take themselves out of the labor force altogether.

The overwhelming majority of the working population will never be able to prepare themselves for a period of unemployment lasting more than six months. As financial-market types worry about possible inflation in a few years’ time, tens of millions of Americans are finding themselves in a very real personal financial crisis to which there is no visible solution. Given the Fed’s dual mandate, it makes sense to keep interest rates low for the foreseeable future. Inflation is possible; unemployment is catastrophically real.

The Atlanta Fed charts how the number of people who work part-time but would like to work full time has doubled since the beginning of the recession. That’s not normal, even by the standards of previous harsh recessions:

Anybody care to hazard a guess why this time is so different? The underemployment rate is a whopping 17%, so it’s not just that the rate has doubled from a low base.

(Via Rampell)

Chris Swann reports that, yes, men have suffered 75% of the job losses in this recession. But look at the last recession: they suffered 86% of the job losses in that one. And the recession before that? More than 98% of the job losses. He concludes:

As the slide in manufacturing and production tails off, male workers can expect some relief. The problems of many women in the workforce are far more ingrained and harder to deal with. Man-cession aside, it’s still a man’s world.

The worlds where I live my professional life — both finance and the blogosphere/punditocracy — are massively overweight men; that’s an unambiguously bad thing. Women are more sensible than men, and less likely to take extreme risks. If we’d had more women in charge of the global financial system, I suspect that the most egregious excesses of the past decade would never have occurred. So if we must have a recession, then a man-cession is exactly what we need.

Jake is on fire with employment charts this morning in the wake of the atrocious payrolls report. This one in particular is new to me, and extremely sobering:

Even at the worst points of the worst recessions of the 1970s and 1980s, never has the number of hours worked per US person been lower than it is now. And this isn’t happy productive people taking time off because they don’t need to work as hard any more: this is unhappy unemployed people who desperately want and need to earn money but can’t.

What we’re seeing in this graph is, I think, the violent implosion of a large swathe of the working classes. Many of those jobs — the ones which, in the boom, were in or connected to the housing or auto industries in particular — will never come back; if they’re replaced at all it will be with lower-wage, lower-skill service-industry jobs. That bodes very ill for the US economy as a whole, and reinforces my notion that the best-case scenario right now, economically speaking, is essentially a square-root-shaped recession where we rebound from the lows but then fail to grow over the medium or long term.

That said, previous plunges in this graph have been followed by relatively sharp rebounds, so maybe we’ll see the same thing happen again. I just can’t work out what the driver of all that new employment will be.

Rich Miller reported yesterday that a number of luminaries have diagnosed a significant upwards move in Nairu, the rate of unemployment below which inflation starts kicking in — or, to put it another way, the level of unemployment which the Fed should consider to constitute “full employment”. They include JP Morgan’s chief economist Bruce Kasman; Harvard’s Lawrence Katz; and Ned Phelps, who got his Nobel for looking at such things.

Against that, notes Miller, the Fed doesn’t seem to think that Nairu has increased at all.

One of the people Miller quotes as believing that Nairu has risen is Pimco CEO Mohamed El-Erian. I asked him for a bit more detail on his thinking, firstly on what causes changes in Nairu. He replied:

A number of factors are contributing to the increase in theNAIRU. They include:

First, lower labor mobility which, in part, is due to the poor state of the housing market where negative equity positions are hindering what has traditionally been a geographically flexible job hunting process.

Second, the elimination of activities that were facilitated by turbo-charged and unsustainable Wall Street credit factories. These activities that can no longer be supported in a de-levering and de-risking world.

Third, industries–such as autos, finance, and real estate–that are experiencing a major size reset after a period of over-expansion

Fourth, an erosion of skills as people are unemployed for longer

Fifth, the ongoing re-alignment of the global economy in the context of overall over-capacity

All this points to a worrisome picture for unemployment. High rates of unemployment will persist for longer; and the reversion will be to a higher NAIRU. As I noted in today’s FT column, this has implications for the sustainability of the growth recovery, the robustness of social safety nets and other aspects of the social contract, and the mobilization of political support for longer-term structural reforms.

El-Erian also confirmed for me that he reckons a 7% Nairu “sounds reasonable” — well above the 4.8%-5% that the Fed seems to be using.

Determinations of Nairu are always more of an art than a science, but it does seem reasonable to assume that the reasons El-Erian outlines would bring it up. In turn, that’s going to raise problems for right-leaning economists and politicians, who are going to find it harder to extol the abilities of the free market to find employment for all, and thereby dismiss claims that we need to provide a robust social safety net for the millions of Americans who can’t find jobs.

The number jumping out at me from this morning’s employment report is 6.9 million: the total decline in employed people since December 2007. The macroeconomic effects of that kind of change are huge: if each person ends up spending $20,000 less a year on average, that adds up to $138 billion in lost economic activity.

Over 10% of US males, and over 15% of US blacks, are now unemployed — and those are percentages of people who aren’t so demoralized that they’ve simply stopped looking for work altogether. Then there’s the “marginally attached” — here’s the Labor Department’s press release on the official “discouraged workers”.

About 2.3 million persons were marginally attached to the labor force in August, reflecting an increase of 630,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, the number of discouraged workers in August (758,000) has nearly doubled over the past 12 months. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them.

The U6 measure of broad underemployment spiked up from 16.3% to 16.8% — yet another all-time high. I’m well aware that these figures are a lagging indicator, but the absolute levels alone should be more than enough to depress anybody looking for any sign that the US economy is looking remotely healthy. Markets, of course, are still high, and can always go higher. But the fundamentals look much less pretty.