Unemployment Probably Topped 9% in May: U.S. Economy Preview

Source: Bloomberg


May 31 (Bloomberg) -- Unemployment in the U.S. probably surpassed 9 percent in May for the first time in more than 25 years, underscoring forecasts that the economy will be slow to pull out of the worst recession in half a century, economists said before a report this week.

The jobless rate climbed to 9.2 percent, the highest level since September 1983, according to the median estimate in a Bloomberg News survey ahead of the Labor Department’s June 5 report. Other data may show manufacturing and service industries shrank at a slower pace and consumer spending dropped.

“The economy is decaying at a slower rate and that is the best you can say,” said Steven Ricchiuto, chief economist at Mizuho Securities USA Inc. in New York. “I can’t tell you we are out of the woods yet.”

Economists forecast the jobless rate will head to almost 10 percent by the end of the year, depriving Americans of the income needed to propel spending and stoke a vigorous recovery. Access to credit will likely also be limited as record defaults and foreclosures make banks reluctant to lend.


Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aSc829RcWzSc&refer=home

I always add at least 6% to the figure - because of bu$hit's "new math" he instituted in calculating unemployment - adding in 'pretend', 'well they don't exist yet but they might' jobs to pad the numbers.

or people who had to give up homes, live on streets and can't look anymore.

The last major change was under President Clinton and that was an improvement in collection and processing (finally computerizing everything) and a negligible change in definition of unemployed (requiring people waiting to start a new job to have looked for work in the previous 4 weeks).

The US follows the ILO standard of calculating Employment and Unemployment.

And it's usually not outright job loss (though in some cases it is). One common scenario is that employers are refusing to backfill positions and they're forced to take on more and more work to pick up the slack, sometimes with a pay cut and usually with more stress.

It reminds me of Animal Farm: that horse who takes on more and more work until it finally collapses. The pigs don't care and send it to the glue factory. That's where we are.

Thanks Joanne98!

like me... Have another month before I start collecting and am officially on the list...

So many of those laid off in the last two months aren't officially part of this percentage yet.

If you were without work during the week that contains the twelth, and you had looked for work in the previous 4 weeks, you are counted as Unemployed regardless of whether you're eligible or not for Unemployment Insurance.

People not looking for work, such as stay-at-home spouses, full-time students, retirees, or whatever other reason are not considered unemployed because they're not trying to be employed.

... if I'm not yet registered for unemployment, since I was told to wait until after my 60 days are up before registering?

The only other way they'd know is what my employer tells them. And they don't know if I turned around and got hired again right afterwards.

Every month the Census does a survey or 60,000 households and does the funky math to represent the entire country. Of course this means it's not exact, but there's no way to be exact on a monthly basis. While the news report lists just the result, if you go to http://www.bls.gov/opub/ee/empearn200903.pdf (page 187) the technical details and how to calculate the standard errors is listed. So, for April 2009, the published number of unemployed was 13,724,000. Technically, the number of unemployed is somewhere between 13,397,500 and 14,050,500 at a confidence level of 90%. Similarly, the UE rate is published as 8.9%, while the range is from 8.69%-9.11% (again at 90% confidence). While those are fairly large ranges, they're still usefull, and doing the math for month-month changes, the number of unemployed (and the Unemployment rate) is definitely going up.

Obviously the U6 will be much higher. I expect unemployment not to top out until late next year, 2010.

Unfortunately, things will get a lot worse before they get better. Interest rates are now moving up sharply. The temporary suspension on foreclosures has now expired and more and more people will soon be homeless. There is a big cohort of adjustable rate mortages that will be re-setting at higher interest rates. Commercial real estate forclosures will result as more and more retail tenants close their stores. This news will trigger a second crash on the stock market that will take out the previous November 08 and March 09 lows. People think that because we have a new administration in Washington, that this is the summer of 1933. They are dead wrong. This is only the summer of 1930. The number of banks on the death watch list (305 at the latest count) is increasing and a huge number of bank failures lie ahead. The FDIC does not have the money to prop up these banks. State governments are nearing bankruptcy (California, Michigan, etc.) The federal government will have more and more trouble financing its operations. The Federal Reserve will be forced to raise interest rates to prevent a dollar collapse or face a Weimar scenario. This will trigger even more foreclosures and job losses. Big trouble is brewing, my friends. The decisions that put us on this course have already been made and there is very little that the politicians can do at this point. Perhaps huge increases in tariffs could create jobs at home and provide funds to finance the government, but this would be strongly opposed by the internationalist forces and would likely result in world war.