As if the ongoing jobs data was set to get any better after yesterday’s FOMC Minutes calling for 9% unemployment by the end of the year, we just got another fresh round of weekly jobless claims data. The report came to 627,000 jobless claims this last week.
The prior week’s 623,000 was revised slightly higher to 627,000 claims. Dow Jones was looking for a drop of 1,000 adjusted to 622,000 as its consensus estimate from economists, and Bloomberg had estimates at 620,000.
February’s unemployment is likely to grow considerably. The four-week average was up 10,500 to 619,000. That is the highest since 1982. But here is where the tally gets really bad: the continuing claims grew by 170,000 to 4,987,000. This is the highest level since the claims were tallied in 1967.
This spills over into every aspect of the economy. If people keep losing jobs, it gets harder for them to pay mortgages, buy cars, and pay down credit cards. Unfortunately, our own target of 8.5% unemployment this summer may not even be a speed bump to something worse. Just yesterday, JPMogan (JPM) CEO Jamie Dimon even hinted at bank stress tests being based on 10% to 11% unemployment and all the ramifications of customer payments and finances at that point.
Painful times indeed.
Jon C. Ogg
February 19, 2009
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