Thursday, August 19, 2010

Welcome Aboard But Don't Look For A Lifejacket

Oh Boy! Not a lot of  rosy blush on the initial unemployment claims today. Today it jumped  to 500,000, which is a new high for the year. The 'conventional wisdom'  is that weekly initial jobless claims must be in the 300,000 range or less in order to get any actual job growth. We haven’t been at 300,000 since the beginning of the recession in December 2007.
New U.S. claims for unemployment benefits unexpectedly climbed to a nine-month high last week, yet another setback to the frail economic recovery.
Initial claims for state unemployment benefits increased 12,000 to a seasonally adjusted 500,000 in the week ended August 14, the highest since mid-November, the Labor Department said on Thursday.
Analysts polled by Reuters had forecast claims slipping to 476,000 from the previously reported 484,000 the prior week, which was revised up to 488,000 in Thursday’s report.
You can see ugly trajectory in this Calculated Risk graph.  The economy is just wallowing in its misery. It has not only stalled but now we see upward movement in unemployment. “The economy ran into a wall in August,” according to one analyst quoted in the story.

During the last recession in 1982, the unemployment rate added a full point, from 9.8 to 10.8 in the period August thru December. If you'll remember Democrats regained 26 seats in the House, although they split even in the Senate. It is looking like it will take a miracle for the Democrats to hold losses to that level this year if  the voters run true to form and punish the party in power.

The sad thing is that nobody seems to want to do anything about it. 

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