Job Losses Worse than Expected

Not a pretty set of numbers. The recession on Main Street continues as the unemployment rate jumps to 10.2% and losses for October come in at 190K. This is substantially worse than the unemployment rate of 9.9% and 175K in losses that analysts were expecting.

The one bright spot in the report appears to be the 0.3% increase in hourly earnings. All in all, it looks like an ugly report at first glance. The dollar is surging on the news as the risk trade comes off the table. Futures are down nearly 1% following the news.

At this point in the chess game you have to start thinking several moves ahead. The unemployment rate is likely to remain very high into Q1 & Q2. What will the chatter from Main Street be in June of 2010 if the unemployment rate is at or near 10% and the Fed and White House continue to ramble on about their recovery that has been fictitously printed on your devalued currency?

Comments

[John Galt:]

The last thing Americans will want to hear in June of 2010, is Joe Biden yap about saving a few hundred thousand jobs after we lost 9 million jobs and spent a trillion dollars.

Nov 06 11:10 AM

[Mad Hedge F...:]

vhi Ouch! Another 190,000 jobs went down the crapper in October, taking unemployment rate to a new 27 year high of 10.2%. Add in discouraged job seekers, and that puts the jobless rate at gut churning 17.5%, and over 20% in California. Along with yesterday’s stunning, gob smacking 9.5% increase in Q3 productivity, the figures point a giant arc spotlight on what is really happening in the economy. Companies are still firing workers en mass to boost profits. After getting blood from a stone they are returning to the same rock for one more drop. I guess if I fire myself, the profitability of my business would go through the roof too, and maybe even my stock would rise. At least then I would then be rid of my oldest, most expensive but least productive employee, who is the worst to get along with, max’s out his sick and vacation days, and wears the same clothes to work every day, even when there lipstick on the collar. But then who would write this daily letter? Maybe Cecelia, my cleaning lady, would do it. She’s cheap. This explains why when you go into Office Depot these days, there is only one minimum waged employee standing at the cash register, the hours on the phone I have to wait to get technical support from Dell, and the endless unmovable lines at Citibank. America’s service economy has become all about denying service to customers. The scary thing is, with companies firing their way to prosperity, what happens when we get another dip? My theory is that the US has entered an era of chronically high employment that is never going away, no matter what the government does. Goodbye USA, hello Germany!

Nov 06 01:32 PM

[E Nuff Sed:]

Situation was worse in the 70's. Unemployment was similar or worse and interest rates were sky high. Somehow we came back for a 20 year bull market.

Nov 06 10:24 PM

[enigmaman:]

Yes true but what we have now is high unemployment and historically low rates, as employment and the economy improve rates will rise which will impede economic recovery. Quite a big different in the scenario that you imply. In the 70s we had the wind to our back pushing us forward now we have the wind in our face.


On Nov 06 10:24 PM E Nuff Sed wrote:

> Situation was worse in the 70's. Unemployment was similar or worse
> and interest rates were sky high. Somehow we came back for a 20
> year bull market.

Nov 07 10:27 AM

[Jeffrey Sum...:]

That 'somehow' was called Ronald Reagan.


On Nov 06 10:24 PM E Nuff Sed wrote:

> Situation was worse in the 70's. Unemployment was similar or worse
> and interest rates were sky high. Somehow we came back for a 20
> year bull market.

Nov 07 11:53 AM