24/7 WallStreet: Can The US Economy Eat Eight Million Jobs This Year?

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Can The US Economy Eat Eight Million Jobs This Year?
Posted: March 4, 2009 at 5:18 am


Using the US government’s count, about 2.4 million people lost their jobs in America last year. That does not include people who have been jobless for an extended period and are no longer looking for jobs. In January, another 598,000 people were put onto the streets by their employers, moving the unemployment rate up to 7.6%.

According to MarketWatch, the average forecaster thinks the economy shed 640,000 jobs last month. Some of the estimates are well over 700,000. The impression that the employment situation is getting worse was confirmed by Ben Bernanke’s comments testimony to the Senate yesterday.

Analysts may admit to a frightening February unemployment rate, but most either believe that the economy is going to get better or don’t want to say in public what they think. While it is comforting to claim that the February numbers will be a bottom for employment erosion, that may not be the case. The joblessness rate could thunder higher between now and year-end.

During the 1980 to 1982 recession, unemployment went from 7.9% in October 1981 to 10.1% the following September. Over the two months after that it hit 10.8%. The notion that 10% unemployment will not arrive until next year, if it comes at all, is bogus.

The proposition that the stimulus package and new budget will create jobs may be true. It is also true that not enough money will reach companies which actually have payrolls to have much impact on their hiring this year. No one knows whether the programs will work. Since they are untested, particularly in an economy this large that is destroying itself this fast, trying to assess their chances of success is as tough as making a winning wager on which dog team will win the Iditarod. .........(more)

The complete piece is at: http://247wallst.com/2009/03/04/can-the-us-economy-eat-eight-million-jobs-this-year/