Are things going to get worse?

Oh yeah! Hold on. Sure, your stock holdings are down - but if you hold long enough, that might all work itself out. However, job losses will cause real near-term pain and the reality is: the job losses are not there yet. This is one stat that is really easy to measure and fairly reliable: non-farm payroll figures are released by the government on the first Friday of every month and these numbers frequently kick off a frenzy of speculative trading in the foreign exchange markets. Interestingly, the unemployment rate in September stayed steady at 6.1%. About a year ago, the unemployment rate was 4.7%, so it has grown, but there have not been any recent surges. I am not sure of the typical lag, but I have to believe the job losses are coming. The unemployment rate has not hit 10% since the government reported it in it's current form in 1942 - - the highest being 9.7/9.6 in 1982/83 respectively. Those were the only years it ever rose above 9%. When people start losing their jobs, this will be a lot more painful than the loss of homes from bad loans (which should not have been made anyway). The unemployment rate reached almost 25% during the depression in 1933, but I can't imagine that we will screw up that bad this go around. So, things are not that bad yet. I am sure they will get worse, but confident they would be nearly as bad as they have been for those before us.

3 Responses to “Are things going to get worse?”

  1. Administrator says:
    From 6.1% to 6.7% for November report - .3% per month over two months. The next report for Dec #'s (on Jan 9th) should be interesting . . will we eclipse 7%. I am pretty sure of it > on the way to 8%
  2. Administrator says:
    OK, 2008 is over and the latest job loss reports are out: "The Labor Department said the national unemployment rate rose to 7.2 percent in December, the highest level since January 1993. The jobless rate was 6.8 percent in November." For the past four months, the report has included substantial adjustments for prior months > this has been happening faster than we can keep track of and the momentum does NOT appear to be slowing. 6.1 to 7.2 in one quarter. 1.1%. 3 more quarters like this and we are at 10% by September. Hold on to your hats.
  3. Administrator says:
    Biggest Monthly drop yet - .5% Nonfarm payroll employment continued to fall sharply in February (-651,000), and the unemployment rate rose from 7.6 to 8.1 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Payroll employ- ment has declined by 2.6 million in the past 4 months. In February, job losses were large and widespread across nearly all major industry sectors. Unemployment (Household Survey Data) The number of unemployed persons increased by 851,000 to 12.5 million in February, and the unemployment rate rose to 8.1 percent. Over the past 12 months, the number of unemployed persons has increased by about 5.0 million, and the unemployment rate has risen by 3.3 percentage points.

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