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Sheldon Filger

Sheldon Filger

Posted: April 5, 2009 09:29 PM

U.S. Unemployment Rate Soars to Great Depression Levels


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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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 i...
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 i...
 
 
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12:29 AM on 04/08/2009
Gregory Haralson recommended this article
10:29 AM on 04/07/2009
Thanks again for the _Accurate_ information, HuffingtonPost.

< "March unemployment figures released by US Labor Department indicate that... 663,000 jobs VANISHED in _past month_, raising official national unemployment rates from 8.2% to 8.5%, levels not seen since 1983!!!!
The LaborDepartments statistics show that job losses occurred in ALL SECTORS of US economy: white & blue collar, manufacturing & service sectors, private & public arenas.

Since the current recession officially commenced December of 2007, more than FIVE MILLION Americans have joined ranks of the unemployed.

However, bad as official statistics are, the underlying reality IS ACTUALLY MUCH WORSE....the Department no longer [even] includes "discouraged" workers in its unemployment figures.
In addition, the 'UNDEREMPLOYED' are also EXCLUDED.... millions of Americans [that] have been FORCED OUT of full-time employment, & can ONLY find PART-TIME JOBS with much lower salaries & 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 unemployment rates that the US encountered during the... Great Depression." >

For COVERING UP and HIDING these BASIC FACTS, which American taxpayers SPEND GOOD MONEY for economists to count & measure, the editors/publishers of the NY TIMES, WashPost, networks, & "lesser media" SHOULD BE PUBLICLY WHIPPED & put in stocks, for DEFRAUDING the American people.
(sigh - I'm an "anti-corporal punishment "Lefty", but the CONSPIRACY to DECEIVE & DEFRAUD Americans is SO VAST, DEEP, & PERVASIVE, that it truly is _criminal._)
iridium53
Semper Fi
01:14 PM on 04/07/2009
How about just an organized, persistent investigation to determine the root causes of the problem.

What happened? When? Who did it? If their was deceit, how did they manifest it?
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ANuttyReader
01:33 PM on 04/06/2009
The great depression is coming, the great depression is coming.

You have to read history, unemployment numbers were 25%.. we are nowhere there.

Things are bad but not that bad, please don't make it worse by pulling the fire alarms when there is no fire.
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BCubedReg
Everything is possible
02:50 PM on 04/06/2009
There may be no "fire".. but there certainly is smoke.
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andyboy
Little bit Country, little Chicago Blues
01:00 PM on 04/06/2009
Sheldon,

Your obviously trying to panic everybody. How are we ever going to get back to normal if you keep telling everybody the truth?

Lying, as we have seen, is the one major component of the "recovery". They said the bailouts and stimulus would cost approx $150 billion. I got some bad news kids it's already almost double that. Approx $270 billions. They sold you a bill of goods. You had no say so whatsoever. They take the money you worked your hind end off for and throw it away never to be seen or heard from again.

Time to stand up you little woosy Democrats and start screaming bloody murder. Before it's too late.

Or maybe we don;t want to hurt Barack's feelings?
11:59 AM on 04/06/2009
To put that 15.6% unemployment rate into context. That number is the U-6 measurement and was 12.8% in January 1994 (the first month the measurement came into being) and 11% in January of 2003. Also note that January 1994 was already over two years into an economy boom cycle, so the U-6 was probably around 15% back in 1991-1992 (measurement didn't exist then). Historical rates since January 1994 are listed in this link.

http://www.economagic.com/em-cgi/data.exe/blsln/lnu03327709
11:52 AM on 04/06/2009
Two meaningful figures would be the unemployment rate among heads of households and the percentage of household expenditures covered by the income of the head of the household.
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11:47 AM on 04/06/2009
the third and worse depression of the shrub era begain in oct 2007 and the shrub depression begain in aug 2008.....the last depression in 1929 which was worse (25% unemployment) took ten years to begin to recover from so why shouldn't this one take just as long?
11:27 AM on 04/06/2009
The author makes a mistake in equating the current U-6 unemployment rate, which counts underemployed workers as unemployed, with the high unemployment rates of the Great Depression. The main reason is that someone that used to work 40 hours a week that now works as many as 30-35 hours a week is classified as unemployed, when in fact they are still employed. During the Great Depression these folks would still be considered as employed. The author should also take into account that the worker participation rate was much lower in the 1930s because women didn't work nearly as often as they do now. The fact that a large percentage of workers were employed on farms back in the 1930s makes a big difference as well. Back then a much much larger percentage of the industrial and construction sector workforces were unemployed as compared to now. Right now non-residential construction levels are still strong (although commercial is deteriorating), whereas construction outside some government infrastructure programs in the 1930s was virtually non-existent. There was barely any investment in residential housing, commercial construction, and in manufacturing throughout the Great Depression
11:15 AM on 04/06/2009
There is great positive potential in deflation of the bubble. There will be an increasing feeling of hardship. That is needed to reset the expectations and aspirations of individuals. Out of difficulty and challenge will come creativity and real economic growth.... if the politicians and finaical powers that be will only allow it to happen.

Our capitalist system, with reasonable controls and regulation, is truly the goose that lays the golden egg. But there are two areas of corruption disable it. One is the emphasis on easy money.... money that isn't earned, but is "created" for undeserving people to their unfair advantage and the disadvantage of everyone else (eg. Henry Paulson who "earned" $600 million in a few years, .... boy, you must be a terrifically productive guy Henry, pure corruption of the system).

The second area of corruption is where real money is distributed broadly in small amounts to undeserving people. Of the many available examples of that, here are but a few: Overly generous union contracts, welfare and medicaid cheats, earmarks, broad based government programs that reward people without any connection to behavior or macroeconomic effect.

It is emminently possible to construct a fair system in which there is a middle class, risk/reward and effort are rewarded on small and large scale, and a broad prosperity fuels healthy industries and instituions. However, the current situation has developed to the point where the two types of corruption identified threaten to kill the goose..... to all of our detriment.
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marinara
10:24 AM on 04/06/2009
we need to prove that banks benefit from these cyclic waves. The bigger and more massive the wave the more profit and treasure the banks can extract. Of course bank manipulation distorts the wave somewhat, making the slide into depression slower, and the recovery slower.
10:38 AM on 04/07/2009
true... but ONLY because the weatlhy & financial fraudsters have MASTERED the ART of EXTORTING CONGRESS for TAXPAYER TRILLIONS when their damn banks/"finanical institutions" FAIL.
US Taxpayers put on the hook for ONE TRILLION dollars (in 1980s dollars) in the 1980s Savings & Loan Debacle..... and ALREADY this economic crisis, Taxpayers have forked over THREE TRILLION "real" dollars (actually, MORE DEBT on the already over-extended National credit-card) - with the INSANELY CORRUPT Obama/Geithner/Rubin/Summers/Emanuel crew LOOKING to MAKE THE TAXPAYERS "guarantee" (_PAY OUT_ !!!) ANOTHER $3 PLUS Trillion dollars!!
and even THOSE amounts are VASTLY Insufficient to the task - I have read that JPMorgan-Chase has $88 _TRILLION_ in outstanding "DERIVATIVE" losses, and Goldman-Sachs on the low end of the Big-5 with $18 TRILLION in losses.

Whether or not these figures are 100% accurate, the GREATER CRIME is that - after SPENDING $3 TRILLION in TAXPAYER DOLLARS to PROP UP these FAILED, CRIMINALLY FRAUDULENT organizations, WE HAVE NO IDEA, what are NOT allowed to know, the TRUE extent of their losses /black-hole Debts!!!

This is COMPLICITY with CRIMINAL FRAUD on part of Obama administration....
10:17 AM on 04/06/2009
Can you provide a link?
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Overtone
See bio on the Aesop Institute website
09:50 AM on 04/06/2009
15.6% UNEMPLOYED Instead of a recession, we are indeed in a depression.

A Human Investment Tax Credit program was designed to generate 3 to 6 million new jobs and encourage between 1 to 4 million men and women to become self-employed.

The 2009 Report can be downloaded free at aesopinstitute.org.
The 1977 job tax credit program, which adopted a few of the incentives recommended in an earlier Report, generated almost a million private-sector jobs; twenty percent of all new jobs created that year. It resulted in more jobs in less time than any prior legislation.

There are now two versions. The full 52 page document contains a new economic analysis. A shorter version contains the Summary and a total of 15 pages. The tax incentives in the Human Investment Tax Credit program have been updated and can be debated and voted into law.

Urge your Representative and the House Ways and Means Committee to debate and discuss this important legislation without delay.
09:22 AM on 04/06/2009
Historical unemployment rates:

1929 .... 3.2% Hoover Era, Great Depression begins
1930 ..... 8.7%
1931 .... 15.9%
1932 ..... 23.6%
1933 ..... 24.9% < New Deal begins
1934 .... 21.7%
1935 ..... 20.1%
1936 ..... 16.9%
1937 ..... 14.3% < Recession Begins
1938 ..... 19.0% < Recession Ends
1939 ..... 17.2%

Many of these years included a + GNP. Unemployment is but one metric of measurement of this recession/depression, and unfortunately it's often a lagging indicator.

As you can see, Roosevelt began relatively modest deficit spending that arrested the slide of the economy and resulted in some astonishing growth numbers. (Roosevelt's average growth of 5.2 percent during the Great Depression is even higher than Reagan's 3.7 percent growth during his so-called "Seven Fat Years!") When 1936 saw a phenomenal record of 14 percent growth, Roosevelt eased back on the deficit spending, overly worried about balancing the budget. But this only caused the economy to slip back into a recession, as the above chart shows.
11:19 AM on 04/06/2009
GDP growth rates during the depression are meaningless because the economy grew from extremely low rates, from way way below trend. Note in your chart that unemployment never went below 15% during the 1930s despite the fact that the federal government more than tripled spending during this period. That is a failure of policy. Investment was very low throughout the period and a big reason for that was the NRA, which was later declared unconstitutional, and the mountain of Roosevelts anti-business legislation. FDR even blamed the 1937-1938 on business, saying they stopped investing to spite him.
11:51 AM on 04/06/2009
"GDP growth rates during the depression are meaningless because the economy grew from extremely low rates, from way way below trend"

Meaningless? Hardly. They are simply another metric in evaluating economic health. If they were truly meaningless than we should be equally pleased with negative GNP, and that's simply bunk.

With regard to the NRA -- just one facet of the New Deal -- many of the labor provisions of the NRA were then folded into the Wagner Act of 1935.

Revisionist history is the hallmark of the right.
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maryyooch
08:05 AM on 04/06/2009
I am one of those people who was laid off in late 07. I have gotten my first extension, which in TN you can only get after your initial unamployment runs out and you are still out of work for 6 months. Then I got the little extension Bush was forced to put in. Can you answer for me, did President Obama put in another extension for the uneployed? I have been everywhere, there aren't even McDonald's jobs out there!
09:00 AM on 04/06/2009
Yes -- The President put in another extension and raised the amount by an additional $100 per month as a part of the stimulus package. The only caveat is that this must be "approved" by each state receiving the money, and some Republican governors have threatened not to accept that portion of the money.

Luckily, James Clyburn (D - S.C.) included a clause that will allow the state legislatures to overturn any governor's decision to turn down the funds.
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ClarcKing
Citizen
03:25 AM on 04/06/2009
Geithner, Bernanke and Summers are giving us the "Katrina Help" plan; an economic and population contraction policy.
09:05 AM on 04/06/2009
Don't even dare to put this on Geithner, Summers and Bernanke. This was a catastrophe 8 years in the making. Geither pointed out a very true reality this week -- unemployment rates will probably rise for months -- even as the economy begins to rebound.

Case in point -- Consumer confidence is up for the first time since the bubble burst. The country's feeling about the direction that our country is moving has also risen for the first time.

Make no mistake about it -- things are turning upward. Thank God for Obama's foresight in tackling unemployment insurance and food stamps to cushion the blow for hard-hit families.

My girlfriend lost her job a year ago and has two children. It's food stamps and unemployment that are allowing her to breathe again.