US unemployment has climbed to a five-year high, with August’s payroll numbers coming out lower than expected. Bloomberg reports:
Payrolls fell by 84,000 in August, and revisions added another 58,000 to job losses for the prior two months, the Labor Department said today in Washington. The jobless rate jumped to 6.1 percent, matching the level of September 2003, from 5.7 percent the prior month… Payrolls were forecast to drop 75,000 after a previously reported 51,000 decline in July, according to the median estimate of 76 economists surveyed by Bloomberg News. Estimates ranged from declines of 40,000 to 150,000. The jobless rate was projected to remain at 5.7 percen
Bears, if you didn’t believe those Q2 GDP numbers, you now have these to latch on to.
Granted, unemployment is just one of the indicators the National Bureau of Economic Research uses to call an official recession (others being sales, incomes, production and of course, GDP) but it’s likely to be the number that strikes the most fear into the heart of your average American.
Plus, as this nice chart from Calculated Risk shows, there’s an obvious correlation between unemployment and recessions (the grey areas) - and there seems to be a slight lag between actual recession and the peak of the unemploment rate. Oh dear.
Related links:
Preachin’ the GDP good news since ‘78 - FT Alphaville
