Double-digit unemployment is finally here, and it's here in a big way: unemployment jumped from 9.8 percent last month into the double digits, a .4 percent increase to 10.2 percent. At the Business Channel, Dan Indiviglio breaks down the utter bleakness in the numbers.
It's an event the White House has expected, and has been hedging against, all along: they've said since early summer that unemployment may crest over the double-digit mark, and, more recently, as administration officials have brought the good news of 3.5 percent third-quarter GDP growth, they've made some more direct predictions that this would happen.
President Obama has forecasted more job losses twice in the past week. In his weekly radio/YouTube address on Saturday, Obama warned that "We will likely see further job losses in the coming days," even as he posed the GDP numbers as an encouraging indicator, and on Monday, at a meeting of his Economic Recover Advisory Board, he reiterated the predication, saying, "We anticipate that we're going to continue to see some job losses in the weeks and months to come." Two weeks ago, Christina Romer, who chairs Obama's Council of Economic Advisors told Congress's Joint Economic Committee that unemployment would remain at a "severely elevated level."
Coincidentally, the president will sign a bill today to extend unemployment benefits, passed yesterday by the House--which should provide him with a few positive headlines among the bad.
The White House message on unemployment has been the same since January: things will get worse before they get better, and unemployment lags behind other indicators. As the national unemployment rate hit 9.8 percent last month, that came to mean that, in the White House's eyes, unemployment would probably reach 10 percent.
Looming double-digit unemployment has, in fact, been an economic and political storyline since Obama took office. Every month the same questions are asked: are further job losses bad for the administration? Will unemployment reach double digits, and what will the White House say if/when it does? Given that unemployment lags behind economic indicators like GDP growth, it's something the White House has had time to think about.
Every month, they've reminded us of the lag.
What's stunning about today's numbers is not just that more jobs have been lost, or that unemployment has hit double digits. It's that it jumped .4 percent in one month, leapfrogging all the way to 10.2 percent.
In the administration's official statement on the numbers, Romer called the new number "a stark reminder of how much work remains to be done," but also pointed to some positives. From her statement:
Today's employment report contained both signs of hope for recovery and painful evidence of continued labor market weakness.
Payroll employment declined 190,000 in October, continuing the steady trend of moderating job loss that began last spring. Furthermore, the employment loss in both August and September was revised down substantially. Importantly, employment in temporary help services, typically one of the first industries to see job gains, increased by 33,700. The motor vehicle industry also posted employment gains. These are hopeful signs that the unprecedented policy actions are working to stabilize the economy and put us on a path toward recovery...
Today's numbers may be very, very ugly, but the White House appears to have been ready for them for some time. Expect administration officials to recognize the economic suffering that 10.2 percent indicates, but don't expect anyone to say they were surprised.
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