Unemployment Flashes Back to Early-80s Level
- Dec 11, 2008
Almost 27 years ago, in early 1982, Ronald Reagan was fairly new in the White House, the Internet was embryonic and a lot of Americans were drawing unemployment benefits. In fact, that was the last time more people were receiving benefits than they are now, according to the U.S. Department of Labor, which pegs the current figure at 4.43 million. The number of first-time filers last week jumped by 58,000 to 573,000, also a 26-year high, and to surpass the increase last week in continuing claims, one has to go back to 1974. As if that wasn’t enough, the quarterly UCLA Anderson Forecast, released today, is predicting that by the end of next year, the nation’s unemployment rate will be about 8.5 percent. That isn’t Great Depression territory–namely 25 percent unemployment at a time when typically there was only one wage earner per household–but it still represents a painful loss of about 2 million more jobs in 2009. The outlook for California, which has been particular hard-hit by the popping of its residential real estate bubble, is equally dolorous. UCLA predicts that the state’s unemployment, which is currently at 8.2 percent, could rise to 8.7 percent. TracRealty has reported that housing foreclosures fell 7 percent from October to November, though the November 2008 total was 28 percent more than in November 2007. The company, which markets foreclosure properties, posits that the decline isn’t indicative of a lasting slowdown, but rather foreclosure-delaying tactics by states. “There are several indications that this lower activity is simply a temporary lull before another foreclosure storm hits in the coming months,” noted RealtyTrac’s CEO James Saccacio in a statement. According to the U.S. Department of Commerce, there was a jump in the U.S. trade deficit in October, from $56.6 billion to $57.2 billion. The increase was a surprise to most observers, reports the Wall Street Journal, and seems to indicate that the U.S. appetite for cheap stuff from China hasn’t quite been extinguished by the recession. “The trade deficit remains large because of high prices for imported crude oil and refined products, subsidized imports from China, and the continuing woes of the Detroit automakers,” writes Peter Morici, professor at the Robert H. Smith School of Business, in his weekly newsletter. “At about 4.8 percent of GDP, those pose a significant drag on the economy and combine to destroy millions of high-paying U.S. jobs.” Early in the day, the stock market seemed to take these numbers to heart, with the Dow Jones index dropping as much as 1.3 percent, but toward mid-day rallied, and now stands at a slight 0.1 percent up. The S&P 500 and Nasdaq roughly mirrored the Dow, and are 0.12 percent up and 0.11 percent down, respectively, early in the afternoon.