Week in Review: 15% - America's Real Unemployment Rate
The Bureau of Labor Statistics released the latest unemployment report showing that the US economy has now lost at least 650,000 jobs for three consecutive months, the worst decline in percentage terms over that length of time since 1975. The rise in the unemployment rate from 7.6% to 8.1% translates to an estimated 12.5 million jobless Americans. However, this rate may be even higher in real terms. As shown in the NY times graphic on the left, the real unemployment rate may in fact be closer to 15% when factoring in participation rates and part-time workers who want to work full time.
The picture is even more grim in rural parts of America, worst hit by the recession, where base unemployment rates are well into the teens. At this rate we will rapidly move from a recession to a depression, which may last a lot longer than I thought. The stock market, which is a forward looking indicator, also fell to record lows - suggesting more pain ahead. The continued falls in the stock market have at least validated my decision to temporarily lower my 401K contributions and move to a much more defensive position.
My articles this week on the FDIC going broke and Dow Panic stations, reflected my overall pessimism and it seems that the Obama administration is going from a position of inspiring change to looking like they really don't know what to do. It is looking more and more like the US government, despite throwing every last dollar at the problem, is helpless to stop the tsunami of bad economic news. Time - with a significant erosion of wealth - is the only thing that will end these dark days. Until then, hang on.
Finally and on a slightly brighter note, don't forget to the enter the $100 Economic Stimulus Competition. There are 10 entries to date and with two $50 cash prizes to win you have a great chance of winning mini-stimulus.
A sampling of other articles I enjoyed reading this week from around the blogosphere:
- Choosing The Best IRA For Your Needs: Traditional Or Roth
- Obama promises to cut annual deficit in half by 2013
- I Don’t Want Your Freakin’ Extended Warranty…
- 5 Things to do when you're unemployed. Hint: It's not job hunting.
- No Risk Stock Market Investing
Finally, from the Daily Show with Jon Stewart here is a great video lambasting CNBC (and Rick Santelli in particular) about their recent bashing of home owners getting help under Obama's housing plan. The irony really made me laugh and I can see a Michael Moore style documentary coming from this piece!
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Related:
~ 5 Clear Signs your Job is in Danger (and 5 things to do)
~ Obama's 2010 - $3.6 Trillion - Budget and My Money from Taxes to Health Care
~ Your Work, Home and Auto Tax Breaks in the 2009 Economic Stimulus Package
~ American Employees: Cheap to Fire
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March 7, 2009 1:17 AM
Love the humor of the day. Thanks for sharing that.
March 9, 2009 1:37 PM
I love the video. Awesome.
March 10, 2009 4:16 AM
I saw that daily show, it was great. It could have been a 2 minute thing about Santelli about ending being a bashing of CNBC in general.
That being said, I read an article from Warren Buffet on CNBC ( could not find the link outside of the AP- http://www.google.com/hostednews/ap/article/ALeqM5hXpjHStIsq2JNctH6DhRNviKcXBAD96QJ7DG1 ) about the current state of the economy and it falling into his "worst case scenario" and expecting unemployment to get much higher but still optimistic about the overall economy in the long term. Nothing all that new but I had thought about it when I saw this post about unemployment and CNBC.
March 10, 2009 4:20 AM
Nice article. However it would be nice to have your charts going as far back as the Great Depression. Otherwise seems like apples and oranges are being compared. Anyways thanks for the link!
March 10, 2009 12:06 PM
nice one, very informative
March 14, 2009 3:47 PM
Thanks for all the comments. DGI - I will try and get that chart for an upcoming post on a related topic.