Ouch! Jobless Rate Highest in 25 Years

This really says it all. The economy has lost about 2.5 million jobs over the last four months. The jobless rate is now 8.1% which is the highest in 25 years.

Comments

[Moon Kil Woong:]

Ouch is a good way of saying it. Even though it may look like the rate is declining don't be fooled. The large job losses prior are due to adjustments this month. There is a good chance this month's losses may be adjusted upwards as well.

Mar 08 05:31 AM

[Ferdinand E...:]

The conclusion from this is obvious, isn't it? The talking by the movers and shakers will have to end, and they will have to get down to serious business.
May a humble academic energy economist make a suggestion: the present energy team - or environmental team as I call it - needs to be called in for a short briefing on an efficient energy policy.

Mar 08 08:59 AM

[toobad41:]

Your charts are very informative. I am anxious to see what will happen in the next couple of months. Lay-offs tend to come as an end product of a recession. It is a knee-jerk reaction to declining profits and poor management. The majority of the problems in this country are in states that have been in economic straits long before this crises hit. Michigan, California, Florida, and Nevada come to mind.

Mar 08 11:17 AM

[henarl:]

The question is: Are new jobs being created as fast as old jobs are being lost? Apparently not!

Mar 08 12:42 PM

[carey_jim:]

It's one thing to argue that U3 is an adequate measurement of unemployment but it is another thing to compare U3 with U6 of 30 years ago and then talk about the two numbers AS IF they were measuring the same thing.

John Williams is a respected authority on Government economic data and he says that 'real unemployment' is around 15% 'taking out all the funny games they've played.'

I've been providing links to the data of the 1930's for the last six months and, believe me, I have no axe to grind except the axe of finding out the truth.

From 1936 until 1942 when America entered World War II, the GDP was growing ( From Mark Perry's financial blog:
mjperry.blogspot.com/2... unemployment, while high, was also falling.tinypic.com/view.php?p...

In 1936, when the GDP started growing again, unemployment dropped from 20.1 to 17.0. 1937 saw another slight recession but unemployment dropped to 14.3 and then spiked to 19.0 in 1938 even though the GDP started growing again.

Then it began moving down until the eve of our entry into World War II:

1939 17.2
1940 14.6
1941 9.9
1942 4.7


The bottom line here is that our 'real unemployment' numbers are beginning to resemble the numbers from 1936 to 1942.

Whether we will reach the unemployment levels of 1931-1935 can't be known but at least we should use the same measuring stick when comparing.

Mar 08 01:24 PM

[carey_jim:]

As a footnote, I should add that there are several factors that are not reflected by any single unemployment percentage, whether it is U3, U6 or the 'real umemployment' percentage tracked by John Williams.

The three biggest changes from the 1930's, and even the 1950's and 60's, are 1) the huge number of workers from Mexico and other nearby third world countries who work for $10 an hour and less, without worker insurance, retirement benefits or other additional costs to employers and 2)the outsourcing of technical jobs to countries like India where engineers work for around $400 per month, and 3) the sharp drop in union membership in the United States: www.nytimes.com/2007/0...

Mar 08 01:53 PM