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Friday, June 19, 2009

Unemployment: 1/4 of Sates > 10%

"Unless hiring magically picks up, a 10 percent unemployment rate is pretty much baked in." -Mark Vitner, Wachovia Corp.

FN: This is easily the most important news event of the day... as it goes to:

1) Stress Test, both Base Case and Adverse Scenario
2) "Green Shoots" theory...
3) The "Re-flation Trade"...
4) The "Car Industry Bottoming Theory"
5) The "Home Prices Bottoming Theory"
6) The "Equities are in a New Bull Market Theory"

Nuff said.

Unemployment of 10% Spreads, Risking U.S. Recovery (Update1): "More than one-quarter of American states now have unemployment rates higher than 10 percent, and all but two saw a further job-market deterioration in May.

Tennessee and Indiana joined the rank of states, now 13, that have jobless rates exceeding 10 percent, and eight states - - including California, Florida and Georgia -- reached their highest level of joblessness in May since records began in 1976, the Labor Department reported today in Washington.

The figures make it likely President Barack Obama, whose home state of Illinois also passed 10 percent for the first time since 1983, was correct this week in forecasting the national unemployment rate will reach that level this year. With no region escaping the rout, consumers across the country will probably curtail their spending, preventing any boom out of the deepest recession in half a century, analysts said.

“It’s tough everywhere,” said Mark Vitner, a senior economist at Wachovia Corp. in Charlotte, North Carolina. “Nobody’s really been spared.” The biggest increases in unemployment will be in states most dependent on manufacturing, construction and financial services, he said.

For the country, “unless hiring magically picks up, a 10 percent unemployment rate is pretty much baked in,” Vitner said."

4 comments:

Josh said...

Unemployment figures are inevitably understated. They are much WORSE

Mista B said...

What was so amusing about Obama's chart about where unemployment would be with or without the stimulus is the basic economic fact that unemployment is a lagging indicator. In the best case scenario it was going to keep rising. Imo, everything is going to get worse from here. Households have barely begun to de-lever. Given where assets prices have dropped to already, household balance sheets have likely become more levered. So just where are the green shoots going to come from? Not housing. Not consumer spending. Let's face it. The economy needs to contract further.

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jay paul said...

Nice post! Can’t wait for the next one. Keep stuff like this coming.

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