The latest jobless numbers are as complex as Einstein’s Theory of Relativity.
Leaving aside the fact that the govenment appears unable to turn out economic figures which are of any use to the press or the public, none of today’s employment data are good.
Continuing jobless claims rose by over 66,000 in the last month to almost 3.3 million. That is an increase of about a third over the number from the same period last year.
The only bit of news that matters from all the statistics is that the trouble in the economy is now hitting the job market in earnest. If this recession looks like 1973/74 and the early 1980s, unemployment will rise to above 8%. Today that figure is 5.5%. On the back of an envelop that means three million more people will lose jobs.
The toll of human suffering is likely to reach its higher level in several decades because the cost of living is rising so fast and prices of fuel and commodities are likely to stay high. Credit is so difficult to come by that the back-up capital from credit cards and home equity have all but disappeared.
The lose of jobs will hit home at the federal government level as hard as anywhere. The tax stimulation package, FDIC funds, and Fed lending have all drawn down massive amounts of capital from Fort Knox. Fortunately, the years of the gold standard are over.
The jobless figures make it look like this recession will be a long one. Companies are starting the process of cutting now, but a slow third and fourth quarter should accelerate that.
The bread line just got longer.
Douglas A. McIntyre