The Meaning of 10.2% Unemployment

Official unemployment finally touched double digits today at 10.2 percent, and my colleagues Dan and Megan have kicked off the what-does-it-all-mean discussion. I have five additional observations.



1) The last time unemployment crossed the 10 percent barrier was September 1982. It stayed above 10 percent for nine months. Nine months from now is the August of a mid-term election year. Bad news for Dems.

2) The broader measure of unemployment, which includes part-timers and people who have stopped looking for work, hit 17.5 percent. This broader measure of unemployment will start to converge with official unemployment before the official rate goes down.

3) It's hard to have inflation when almost one-fifth of a consumer-driven economy is out of work, under-worked or discouraged from looking for work at all.

4) Increased productivity sounds like a good thing, but for at least 17.5 percent of the population, it's not. Employees are squeezing more out of their workers, even with part-time work at an all-time high. That means they'll be morel likely to add hours than add workers as the economy picks up.

5) After dithering on jobless benefits for weeks, Congress just happened to extend unemployment benefits the day before unemployment crossed 10 percent. Sounds like somebody on Capitol Hill was tippped off about today's shocking figure, which was 0.3 percentage points higher than analysts expected. What did Congress know and when did they know it?