While job losses of 598,000 in today’s report for January 2009 were more than the 525,000 expected, it was within the expected range. Evidence of this comes from the increase in long-term treasury yields and stock futures prices immediately after the announcement.
Nevertheless, the number was the largest since 1974 and clearly indicates that the employment market is weak. We have now lost the greatest number of jobs in three months since data keeping began in 1939 – another data point which is telling. The unemployment rate also surged to 7.6%. However, we are nowhere near the bottom. Expect the unemployment rate to surge into double digits before the Depression ends. (Note: I had previously remarked I anticipated the unemployment rate to peak above 9%. I now expect the rate to be much higher than that).
Below is the heart of the U.S. Department of Labor’s employment situation summary accompanying the numbers. I have highlighted the most salient details.Read more ›