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US Unemployment Rate Accelerates at Trader’s Narrative




US Unemployment Rate Accelerates


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Today’s Labor Department data for June’s non-farm payrolls was -467,000. That surprised many since consensus was -350,000. That should put the kibosh on any ‘green shoots’ talk for now. Especially since the losses were not only deep but across the board for every industry.

This brings us to total cumulative job losses of 9 million in this recession (so far!). That’s much more than the historical average in previous cycles.

Not surprisingly, the stock market took a nose dive on the news but you could argue that it has been acting the way it has for the past two months, meandering with no real direction.

This chart compares the most recent recession’s job losses to the previous cycle as well as the over all post World War II average:

unemployment rate chart of the day
Source: Chart of the Day

As the chart clearly shows, this is much more than a run of the mill recession. We’re seeing about 3 times more job losses than in the past. Had this been a ‘normal’ cycle, we would have seen a trough in April 2009.

And even more troubling, we’re seeing signs of wage deflation. Average weekly earnings fell 0.3% in June. On an annual basis, that’s equivalent to about -1.6% compared to +1.8% last year (and +5.2% in 2007).

Here’s another chart showing more granular data for past recessions:

job losses previous recessions comparison
Source: Calculated Risk

The only post World War II recession which had deeper job losses was in 1948. But we are fast approaching that record. On the plus side, the recovery back then was just as sharp.

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3 Responses to “US Unemployment Rate Accelerates”  

  1. 1 Reaganite Republican

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    The misguided “stimulus” legislation has already crapped out: these figures are far worse than the ones the White House warned us about if we DIDN’T pass the bill- but itwas passed, and unemployment soars?

    Instead of creating jobs, interest rates were bumped up, the dollar slid… and it didn’t help anybody get any work. Much of this is due to the fact that Obama’s agenda has mortified almost every machine of job-and-growth creation in the country.

    The One couldn’t deliver the type of “temporary, targeted, and timely” bill that he promised for weeks. Irregardless of his beautified image in the press, Obama lacks the the political stature to control Pelosi and Reid… who hit the trough hard, while bickering like siblings.

    But the lack of GOP co-conspirators exposed Obama politically… this legislation now looks to be a huge gamble. And when all this pork-n-welfare fails to generate any real economic gains… the Democrats could face a bloodbath in 2010.

    One could make the argument that Obama knows his legacy will be in tatters by 2012.. and is ramming through as much of his far-left agenda as he can before the day comes when people cringe at the mere mention of his name… sure seems like it.

    http://reaganiterepublicanresistance.blogspot.com

    ——————————————————————————————————–

    The foolish $700B “stimulus” legislation has already crapped out: these figures are far worse than the ones the White House warned us about if we DIDN’T pass the bill- but it was passed, and still unemployment soars?

    Instead of creating jobs, interest rates were bumped up, the dollar slid… with few actual economic benefits.

    Much of this is due to the fact that Obama’s anti-business agenda has mortified almost every machine of job-and-growth creation in the country.

    The Democrats just HAD to insist on tax-n-spend, rather than a tax holiday for, say, six months… can you imagine how things would be doing with a $700B tax cut instead?

    And the One couldn’t deliver the type of “temporary, targeted, and timely” bill that he promised for weeks, either. Irregardless of his beautified image, in reality Obama lacks the the political stature to control Pelosi and Reid… who hit the trough hard, while bickering like siblings.

    The lack of GOP co-conspirators exposed Obama politically… this legislation now looks to be a HUGE gamble. And when all this pork-n-welfare fails to generate any real economic gains… the Democrats could face a bloodbath in 2010.

    One could make the argument that Obama knows his legacy will be in tatters by 2012, and could care less how much damage his radical programs do to the economy. He’s therefore ramming-through as much of his far-left agenda as he can before the day comes when people cringe at the mere mention of his name-

    Sure seems like it.

    http://reaganiterepublicanresistance.blogspot.com

  2. 2 Dave Narby

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    I agree with Reaganite in this sense:

    1 . The stimulus would have been more effective if they had just given $50,000 to each citizen to spend however they wished, pay down debt or buy goods and services.

    2. Failed banks would have been forced to liquidate and been broken up, and the bailout cash for the banks had been used to create a new public bank, with the intent of breaking it up into many banks, and selling it to the public.

    However, I don’t believe that the Repooplicans are the answer here. They are just as co-opted by the banksters as the Democraps. : p

    We need an independent third party movement, and a brand new financial/monetary system. I’m doubtful we’ll get that with the status quo.

  3. 3 L.A. Jones

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    It is confounding to read of attempts to compare current chart formations to those from decades ago where the macroeconomic forces and debt conditions are worlds apart. Good luck with the bullish scenario, though. If it happens, it will only be due to the self-fulfilling nature of technical analysis.

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