The March unemployment figures released by the U.S. Labor Department indicate that massive job redundancies in the United States are continuing unabated. According to the data, 663,000 jobs vanished in the past month, raising the official national unemployment rate from 8.2% to 8.5%, a level not seen since 1983. The Labor Departments statistics show that job losses occurred in all sectors of the U.S. economy: white and blue collar, manufacturing and service sectors, private and public arenas.
Since the current recession officially commenced in December of 2007, more than five million Americans have joined the ranks of the unemployed.
However, as bad as the official statistics clearly are, the underlying reality is actually much worse. For one thing, the Labor Department no longer includes "discouraged" workers in its unemployment figures. In addition, the underemployed are also excluded. This latter category reflects the somber reality that millions of Americans have been forced out of full-time employment, and can only find part-time jobs with much lower salaries and benefits. When these missing pieces to the unemployment picture are aggregated, the actual unemployment rate in the United States is a staggering 15.6%, which fits in the mid-range of the unemployment rates that the U.S. encountered during the years of the Great Depression.
Like a receding cosmic red shift, the employment contraction in the United States is accelerating. Not even the massive deficit-driven stimulus binge of the Obama administration is expected to have anything beyond a minor impact on the burgeoning American unemployment figures. Even the Federal Reserve, whose Chairman has predicted an end to the recession before the current year is out, is projecting elevated jobless figures into 2011, while several economists predict high unemployment rates through 2013.
It is precisely at this time of unprecedented job destruction, not only in the U.S. but also throughout the world, that stock markets are rallying. The Dow Jones actually rose the day the U.S. Labor Department released its grim jobless statistics. Again we see the opium of optimism pervading Wall Street, while the Global Economic Crisis continues to shred Main Street.
Amid all the uncertainty clouding the global economy and its fate, one thing is certain: the massive rise in unemployment rates throughout the world will facilitate further demand destruction, which in turn will lead to further job losses, as a vicious self-perpetuating engine of economic destruction runs amok. Recall that the initiation of the Global Economic Crisis began with a collective failure to pay the monthly bills on subprime mortgages, at a time when the United States enjoyed record levels of employment, and an official jobless rate below 5%. With the likely impact of rising levels of unemployment on the securitized bank assets based on near-prime, prime and commercial mortgages likely to be highly negative, it would appear that the current "sucker's rally" on Wall Street is just another manufactured asset bubble waiting to implode.
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