12 reasons unemployment is going to (at least) 12 percent

Reuters ^ | 11/11/2009 | James Pethokoukis

[SeekAndFind]

Gluskin Sheff economist David Rosenberg, formerly of Merrill Lynch, thinks the unemployment rate is going to at least 12 percent, maybe even 13 percent. Optimists, Rosenberg explains, underestimate the incredible damage done to the labor market during this downturn. And even before this downturn, the economy was not generating jobs in huge numbers. If he is right, all political bets are off. I think the Democrats could lose the House and effective control of the Senate. I think you would also be talking about the rise of third party and perhaps a challenger to Obama in 2012.

So here is what I gleaned from Rosenberg’s latest report (bold is mine):

1. For the first time in at least six decades, private sector employment is negative on a 10-year basis (first turned negative in August). Hence, the changes are not merely cyclical or short-term in nature. Many of the jobs created between the 2001 and 2008 recessions were related either directly or indirectly to the parabolic extension of credit.

2. During this two-year recession, employment has declined a record 8 million. Even in percent terms, this is a record in the post-WWII experience.

3. Looking at the split, there were 11 million full-time jobs lost (usually we see three million in a garden-variety recession), of which three million were shifted into part-time work.

4.There are now a record 9.3 million Americans working part-time because they have no choice. In past recessions, that number rarely got much above six million.

5. The workweek was sliced this cycle from 33.8 hours to a record low 33.0 hours — the labour input equivalent is another 2.4 million jobs lost. So when you count in hours, it’s as if we lost over 10 million jobs this cycle. Remarkable.

[max americana]

MSM: “The recession is over”

[Uncle Miltie]

0bummer Administration Policies:

1. Nationalize Healthcare
2. Nationalize Banks
3. Nationalize Autos
4. Nationalize Student Loans
5. Nationalize Home Loans
6. Cap and Tax
7. Initiate Trade Wars
8. Increase Tax Rates
9. Print Money Like Mad
10. Force Unionization

Nobody is going to hire while the items above are likely to occur.

[denydenydeny]

We better get cracking on that next trillion dollar stimulus.

[ThunderSleeps]

I'll give you two simple reasons unemployment will continue to rise:

1. Democrat in the White House.
2. Democratic controlled Congress.

Seriously, obama is the most anti-business socialist ever to hold that office.

[massmike]

save

[Attention Surplus Disorder]

Entirely possible that unemployment goes that high and stubbornly stays there. Whether this has a favorable (to us) influence on upcoming elections is another story. Yes, it is logical, perhaps, that an unhappy electorate would kick the bums out. It’s only slightly less possible that a welfare state electorate would vote to continue the programs “that are working so well, if we only give them a chance to work for us”. Think: FDR & GD 1. There are so few Conservative voices calling out 0bama’s influence on the economy. Yeah, again, I understand that anyone with two logically-structured functioning neurons would be able to see the macro economic effects of total government control of major industries, the imposition of egregious cap and trade energy cost increases, and whatever else these scumbags intend to throw at us, but something like half the population thinks this regime is a shining light of progressive thinking. If unemployment gets high enough THERE WON’T BE A CHOICE for many folks, they will be bled to where they (will believe they) *have* to vote for salvation by government. It’ll never not be Bush’s fault.

[alancarp]

Exactly. That list creates huge cost uncertainty in ALL industries and unless the uncertainty is removed, businesses are only spending what MUST spend. The only way to get things moving again is to eliminate those policies, but of course the current people in charge of such things are ideologically bent to see them to completion.

[The Magical Mischief Tour]

Keep your eye on the holiday retail season.

I’ve been saying this for months now, retailers are barely hanging on as it is. Most budget themselves to collect a large chunk of their yearly income during the last 90 days of the year. The Holiday Shopping Season.

First, the retailers are not hiring seasonal help as they should normally do, most start hiring on or about the second week in October to help with the Halloween sales. Most of those who plan to hire say they will hold out until the last minute to hire seasonal help.

If those people are hired at the last minute, that will not be a good sign in and of itself.

Next, the sales themselves will just not be there because folks are scared stiff they will be next on the layoff list, especially after the first of the year when some of the bigger companies will begin looking at this years lost revenue and start cutting costs and overhead.

If holiday sales fall, as most say they will, not only will the seasonal helpers be let go, they will be let go much earlier than normal not staying on the payrolls for the after holiday returns. And there is a very good chance the smaller businesses, having fallen short of the holiday sales needed to pay bills will begin closing, laying off even more people.

The first 90 days of the new year will be a blood bath absent a economical miracle.

I too feel that 12% unemployment is very realistic and just around the corner. No later than March or April of 2010.

[Frantzie]

Here are the only 4 reasons you need that unemployment is going to 15%.

1. Obama
2. Pelosi
3. Reid
4. Democrat Party

[Frantzie]

Here are the only 4 reasons you need that unemployment is going to 15%.

1. Obama
2. Pelosi
3. Reid
4. Democrat Party

[himno hero]

Not only that there will be an exodus of capital.

Exodus

Obama has thought it through.... thats why he is the destroyer.

Where will his electorate get their jobs?

[detective]

It is very likely that unemployment will reach 13% in the near future. I don’t see anything that will stop the unemployment from going up even further.
Private sector jobs are disappearing. The government will run $1 to $2 trillion deficits over the next several years.
Things are only going to get worse, I don’t see anything that will reverse the trend.

[FastCoyote]

I’m in commercial real estate. Nothing is moving. Until you let the banks crash, the system will not purge itself of bad debt and inflated property prices.

[EGPWS]

The recession is over

Hooyah!

http://www.youtube.com/watch?v=Ivlp8aVDuxE

/Major Sarcasm

[Fee]

No matter who holds power, the US economic future is set in stone by the feds due to the political decision not to do the right thing. The right thing is to let the too big to fail fail. This will deepen the recession and increase unemployment, but it will force the prices of homes and offices and other items to drop to its real value. At that point, people with money will step in and buy up the assets at real market prices.
Dem and GOP will not do that and risk losing re election. Bernanke and the feds already know that so they will implement Plan B, print money and inflate our way out of debt and losses. Freepers need to remember that Bernanke has studied the Japanese situation. His conclusion is that the Japanese approach (print money and prop up the banks/insurance companies) is the only politically viable option left. It will mean that we will have a lost generation of workers as the US economy stagnates and have high unemployment for atleast a decade. This policy requires intricate tinkering in order to prevent rampant inflation if the US dollar loses value too fast.
The feds have headed off a total collapse (probably used questionable tactics and deals) but they ushered us into a feeble growth economy with stagnate high unemployment.

[SpaceBar]

Coast to Coast AM had a guest a few nights ago who was an astute financial analyst and not your usual black ops crackpot. He said that the way they calculate unemployment now is different than in the past. They now disregard people who have “given up” looking for work, which greatly underestimates the numbers. He estimated the true national unemployment rate somewhere in the low twenty percent range, and predicted that with current economic policies in Washington it will only get worse.

[LuvFreeRepublic]

BTTT so I can find it in the morning. I don’t need to read anything that is going to give me more NIGHTMARES.

Thanks for the post.

[_Jim]

an astute financial analyst and not your usual black ops crackpot.

Gerald Celente?

"blank ops"

[Uncle Miltie]

44% of my money is in bets against the U.S. So far. Moving judiciously towards 60%.