The announced unemployment numbers released today,

[WCGreen]

meaning the number of people unemployed at any given moment, is a function of temporary job losses. In other words, people transitioning from one sector to the next, those moving about and just plain job cuts caused by the eb and flo of economic activity. The conventional wisdom has been that unemployment of about 4.5 to 5.0% was a sign of an economy humming along at just the right balance. Think of it as baby bear, not to hard, not to soft, just right...

Of course those "benign" stats were arrived at by folks who never seem to have to worry about those periodic downturns.

In order to keep that unemployment stat withing that relatively "benign" number range mentioned above, the economy has to create about 85k to 150k jobs per month just to absorb the natural growth of the economy. That range is basically attributable to seasonal fluctuations. For instance, a lot more people are joining the work force in the late spring and early summer period simply because of agricultural related jobs and people coming out of school.

So having 533k people out of work, actually those who had a job at the beginning of October and then found themselves unemployed sometime in November, is only part of the story. That number in no way accounts for the jobs that needed to be created in order to absorb the organic growth in jobs needed to absorb the growth of the job force.

IF you consider the fact that approximately 1.3 million jobs in the last fiscal year have been LOST and that over that same time period about 1 million jobs had to be created to absorb the expected growth in the job force, you are talking about 2.3 million people actually out of work. And remember, that is a low ball estimate of what is really going on with the labor force.

Sure that number, 533k jobs lost in November, is frightening, but what is more disturbing is that there are now millions of people who are out of work. That is why the economists are all saying things will get worse as the unemployment percentage is going to going to escalate from that 6.7% figure released today.

[fasttense]

1. And for a closer look at reality, the U6 is at 12.5%. n/t

[CaliforniaPeggy]

2. These numbers are truly scary...

It looks as though we're going into a very deep hole, and who knows how long we'll be there, and what will reverse it.

Thank you for your very clear analysis.