Thursday, November 12, 2009

Unemployment Crest

Not a pleasant overview of the economy. James Pethokoukis quotes Gluskin Sheff economist David Rosenberg. There are 12 points, but the last is the most disturbing, at least to me.
12. After all, the recession ended in November 2001 with an unemployment rate at 5.5% and yet the unemployment rate did not peak until June 2003, at 6.3%. The recession ended in March 1991 when the jobless rate was 6.8% and it did not peak until June 1992, at 7.8%. In both cases, the unemployment rate peaked well more than a year after the recession technically ended. The 2001 cycle was a tech capital stock deflation; the 1991 cycle was the Savings & Loan debacle; this past cycle was an asset deflation and credit collapse of epic proportions. And economists think that the unemployment rate is in the process of cresting now? Just remember it is the same consensus community that predicted at the beginning of 2008 that the jobless rate would peak out below 6% this cycle.
Great. Hope & Change is doing so very well. Another stupid belief that the government could actually affect this recession by throwing money at it. Let's not forget that they throw the money at the wrong people as well.

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