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    US unemployment data

    The consensus for US new job losses in August was 230 000, but these came in better than expected at 216 000. The initial July estimate of job loses was raised from 247 000 to 276 000. The pace of decline is at least slowing after peaking at 741 000 in January, which was the most since 1949.

    While the pace of job losses is slowing, the cumulative impact of these job losses means that the total official jobless rate jumps to 9,7% from 9,4%. This is a 26 year high and getting very close to the psychological 10% level.

    These numbers bring the total number of job losses from December 2007 to 6,9 million which is the biggest decline in any post World War II economic slump.

    This does not however tell the full story – because if adjusted for part time employees and discouraged worker – who are no longer considered to be unemployed – then the jobless rate jumps to 16,8%.

    The graph below reflects the sharp rise in unemployment in the US as it heads for an official 10%

    Source: Wells Fargo

    There has also been a sharp increase in part time employed for economic reasons over the last 18 months.

    Source: Wells Fargo

    The period unemployed as measured by the average weeks unemployed has also pushed out to the highest levels since at least 1980 from 16 weeks at the start of the recession to a current 25 weeks.

    Naturally high employment, especially in a high consumption economy is critical. But while the data are not conducive to growth, the direction is possibly more important and investors will be looking for turning points from this very weak level.

    That’s all for today. Have a super weekend

    Kind regards

    Ian de Lange
    021 9144 966

    Permalink2009-09-04, 16:59:26, by ian Email , Leave a comment
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