Wednesday, November 11, 2009


You thought the US had unemployment problems. The official unemployment rate in the US is 10.2%, but according to, the unofficial rate is 17.5%, if you include people who stopped looking for work, and no longer receiving unemployment benefits (i.e. they are still unemployed) and workers at an undesirable position earning less than what they previously earned. These numbers are admittedly horrible by everyone, the worst since the early 1980's by some measures, or the worst since the Great Depression by others.

But Spain has it even worse. Their official unemployment rate is 19.3%, but their unofficial rate is 34%! Latvia's official unemployment rate is 19.7%. Folks, that's no recession--that is an outright depression.

The alleged silver lining is unemployment figures are a lagging indicator, meaning the economy recovers before employment does. This is true, but this Great Recession has been so deep, and the economy has been so severely impaired, that it may take much longer before cash-strapped and credit-starved companies start hiring again.

If the American consumer is broke and jobless, they won't be consuming.

Hence, the "jobless recovery" may not be a recovery at all.

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