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What Green Shoots?
By
Felix Salmon studies today's unemployment numbers:
Yes, unemployment is a lagging indicator. But with adult-male unemployment rapidly approaching 10%, it’s also going to be a serious drag on the economy for the foreseeable future: households with unemployed men are not exactly engines of economic recovery. Incidentally, the other unemployment measure worth keeping an eye on, U6, a broader measure of underemployment, hit 15.8% last month, up from 13.5% in December. So while the headline payrolls number might have fallen less than economists had expected, I can’t really see any green shoots here.
Calculated Risk notes:
The [above] graph shows the unemployment rate compared to the stress test economic scenarios on a quarterly basis as provided by the regulators to the banks...This is a quarterly forecast: in Q1 the unemployment rate was higher than the "more adverse" scenario. For Q2, April is already higher than the "more adverse" scenario, and will probably rise further in May and June.
Many forecasters expect the official unemployment rate to top 10% by early next year. If the path of the broader unemployment rate continues, it’s likely to top 18%. For people in this group, comparisons to the Great Depression (when 25% of Americans were out of work) may not look so wild even if overall economic activity is holding up better.
