Unemployment rate in US surging (to hit 8% next year)

[Omaha Steve]

http://www.boston.com/business/articles/2008/11/08/unemployment_rate_in_us_surging/

By Robert Gavin
Globe Staff / November 8, 2008

The national unemployment rate rose last month at the fastest pace in 26 years, foreshadowing what economists fear could be the biggest increase in joblessness since the recession of the 1970s.

There are now more than 10 million Americans out of work, nearly 3 million more than a year ago, with manufacturing, construction, and retail sectors particularly hard-hit.

Massachusetts has only begun to see employment declines, after adding jobs for most of the past year. The state's strong technology, higher education, and health sciences sectors have helped it to buck national trends. But the economic slowdown is hurting demand nationally and globally for Massachusetts technology products, and the meltdown on Wall Street is battering the state's large financial services sector.

Just this week, Fidelity Investments of Boston said it would cut 1,300 jobs worldwide, or 3 percent of its workforce, which would represent 345 jobs in Massachusetts; and business software maker Egenera Inc. of Marl borough said it would cut 87 jobs worldwide, including 30 to 35 in the state. IHS Global Insight, a Waltham forecasting firm, recently projected the state could lose as many as 76,000 jobs over the next year.

The national jobless rate, which leapt four-10ths of a point to 6.5 percent in October, has already risen more than 2 percentage points since it reached a low point of 4.4 percent in early 2007. Economists expect the rate to continue to rise for more than year, peaking at about 8 percent.

Such an increase, about 3.5 points, would be the second biggest rise in unemployment in any recessionary period since 1950, according to economists at the financial services firm UBS AG. Only the recession of 1973-75, when the Arab oil embargo crippled the US economy and the jobless rate climbed 4.1 points to 8.9 percent, had a greater increase.

"Until two months ago, we were talking a mild recession," said James O'Sullivan, a UBS economist. "It's now a full-fledged recession for sure, and in the end it's going to be pretty severe."

FULL story at link.

[ryanmuegge]

1. Once again, those are the cooked numbers. Imagine what the real rate is.

[MercutioATC]

2. Double it.

...and as unemployment continues to rise, the multiplier gets larger.

8% will probably be something like 18% real unemployment.