AP: What Recovery?

The Associated press has been one of the President’s biggest cheerleaders but with unemployment now topping ten percent even they’re asking What recover?

Just when it was beginning to look a little better, the economy relapsed Friday with a return to double-digit unemployment for only the second time since World War II and warnings that next year will be even worse than previously thought.

The jobless rate rocketed to 10.2 percent in October, the highest since early 1983, dealing a psychological blow to Americans as they prepare holiday shopping lists. It was another worse-than-expected report casting a shadow over the struggling recovery.

President Barack Obama called it “a sobering number that underscores the economic challenges that lie ahead.” He signed a measure to extend unemployment benefits and to expand a tax credit for homebuyers.

Economists had not expected the 10 percent mark to come so quickly and immediately darkened their forecasts. Mark Zandi, chief economist at Moody’s Economy.com, and Joshua Shapiro, chief U.S. economist at MFR Inc., predicted the rate will peak at 11 percent by mid-2010. They earlier had projected 10.5 percent.

Unemployment at 11 percent would be a post-World War II record. Only once since then has joblessness hit double digits in the United States — from September 1982 to July 1983, topping out at 10.8 percent.

The article strikes fairly pessimistic tone in its reporting on the economy and accelerating pace of job losses. The only real quibble I have with it is that the economy hasn’t “relapsed”. Outside of small decline in July because of a statistical anomaly the unemployment rate has been rising steadily all year. In fact October’s month-over-month increase is the largest since May, and four times as large as the last monthly difference.

Ouch: Unemployment Climbs to 10.2%

Ouch, unemployment climbed to a 26 year high in October as as more than 558,000 Americans lost their jobs in October:

In another sign that workers are being left out of the budding economic recovery, the U.S. unemployment rate climbed to 10.2% in October, topping the 10% mark for the first time in 26 years.

Nonfarm payrolls dropped by a seasonally adjusted 190,000 in October, bringing to total number of jobs lost in the recession to 7.3 million, the Labor Department reported Friday. It was the 22nd straight monthly decline in payrolls.

Large losses were seen in manufacturing, construction and retai employment. Health care and temporary-help agencies added jobs. Read the full government report.

The October jobs report shows a growing disconnect between a recovery in economic output and continued job losses. The economy grew at a 3.2% annual rate in the third quarter, with productivity rising at a 9.5% rate.

“The grinding pace of progress in labor markets likely flags a tepid economic recovery,” wrote Sal Guatieri, an economist for BMO Capital Markets.

With unemployment remaining elevated and no sign of job growth, the Federal Reserve could be expected to keep its interest rate target at virtually zero, economists said. Read commentary on the Fed and jobs.

The jobs report was worse than expected. Economists surveyed by MarketWatch were forecasting a rise in the unemployment rate to 10%, with 150,000 lost payroll jobs. An upward revision to August and September payrolls cushioned some of the disappointment, however.

The current 10.2 percent unemployment rate is the highest since April 1993.

According to the Bureau of Labor Statistics 15.7 million Americans are unemployed, of those, 5.6 million, or 35.6% of the unemployed, have been out of work for more than six months… Representing another grim record. When you add in laid-off workers who have settled for part-time work or who have given up looking for work, the unemployment rate is 17.5 percent.

Regular readers know I’m a pessimist about the economy and I don’t anything in this month’s jobs report to change that… Jobs losses accelerated in manufacturing,  the average losses in the previous four months were 51,000 per month, but in October they climbed to 61,000 jobs lost.  Construction improved slightly loosing 62,000 jobs in October, down slightly from the 4-month average of 67,000. Finally, the retail sector lost 40,000 jobs last month – an indication that retailers are anticipating a weak a holiday season.

Unemployment Climbs to 9.8%

If there’s a silver lining in the September Jobs report I can’t find it:

U.S. employers cut a deeper-than-expected 263,000 jobs in September, lifting the unemployment rate to 9.8 percent, according to a government report on Friday that fueled fears the weak labor market could undermine economic recovery.

The Labor Department said the unemployment rate was the highest since June 1983 and payrolls had now dropped for 21 consecutive months.

Analysts polled by Reuters had expected non-farm payrolls to drop 180,000 in September and the unemployment rate to rise to 9.8 percent from 9.7 percent the prior month. The poll was conducted before reports, including regional manufacturing surveys, showed some deterioration in employment measures.

The government revised job losses for July and August to show 13,000 more jobs lost than previously reported. Preliminary annual benchmark revisions, released together with September’s employment report showed that total non-farm payroll employment for March would have to be revised down about 824,000.

There’s really no good news here… In previous months there have been little signs of hope but there aren’t any this month. Everything, hours worked, weekly wages etc. are head down. The only thing going up is unemployment. In fact the male unemployment rate at its highest level since the Great Depression!

Truth be told it’s worse than you think when you add in laid-off workers who have settled for part-time work or who have given up looking for work, the unemployment rate is 17 percent.

You see the raw data here.

Unemployment Climbs to 9.5 Percent

Unemployment climbed to its highest level in 26 years rising to 9.5 percent in June. All told, 14.7 million people were unemployed in June:

WASHINGTON (Reuters) – U.S. employers cut far more jobs than expected last month and the unemployment rate hit 9.5 percent, the highest in nearly 26 years, underscoring the likelihood of a long, slow recovery from recession.

The loss of 467,000 jobs reported by the Labor Department on Thursday was 100,000 more than Wall Street economists had expected, with virtually no sector of the economy spared.

Since the economy fell into recession in December 2007, 6.5 million nonfarm jobs have been lost and the unemployment rate has nearly doubled.

“It looks like the economy was still losing substantial momentum as the second quarter came to a close. This report is weak across the board,” said William Sullivan, chief economist at the JVB Financial Group in Boca Raton, Florida.

U.S. stock prices fell, with the Dow Jones industrial average down 2 percent by afternoon as investors worried the data darkened the recovery outlook. Prices for safe-haven U.S. government debt rose.

Clearly we’re headed in the wrong direction… I said last month that I thought the numbers were misleading and shouldn’t be take them at face value. Simply put we aren’t anywhere near the bottom yet, unemployment is going to continue to rise and I suspect we’ll see unemployment well above 10% and U-6 above 20% before we do reach bottom.

Related

• Payrolls Fall More Than Forecast, Unemployment Rises – Bloomberg.com
  
• Obamanomics Proving To Be An Abysmal Failure – The Strata-Sphere
• A Grim Jobs Report – Larry Kudlow
• Poll: Obama slipping further on economy – Hot Air

Bleak Outlook: Economists See Three Straight Quarters of Economic Contraction

From the Wall Street Journal:

The U.S. economy has sunk into a recession and government action is critical to stem the damage, according to economists in the latest Wall Street Journal forecasting survey. On average, the 52 economists surveyed now expect gross domestic product to contract in the third and fourth quarters of this year, as well as the first quarter of 2009. If those predictions bear out, it would mark the first time U.S. GDP — the total value of goods and services produced — has contracted for three consecutive quarters in more than a half century.

Recession?

Can we put an end to the recession talk at least for now? The last time I checked a recession was defined as two or more consecutive quarters of negative growth. So far we haven’t had a single quarter of negative growth so all this talk of a recession is, well, premature.

Make no mistake the economy is tough shape what with the struggling housing market, credit crunch, high oil prices and week dollar. But we’re not in a recession.

Take a swing over to Kudlow’s Money Politic$ and read Recession? What Recession? for interesting take on today’s GDP number.