Unemployment Blues
Research for Online Investors

by John Dalt

11/10/09

The U.S. Bureau of Labor Statistics released unemployment figures Friday morning, surprising the market with a jump to 10.2%  It had been widely predicted that unemployment on the ‘U-3’ index would top 10%, but not this soon.  The market expected 9.9%, but reacted with resignation.  The attitude seemed to be, “We are going to get there anyway, why not get it over now!”

This official unemployment number does not include those that have given up looking in the last four weeks, are working part time while looking for full time work or have been dropped from unemployment rolls because their benefits ran out.  If these people are included, the more comprehensive ‘U-6’ number is 17.5% unemployed.  Some economists believe the actual number may be as high as 22%, unprecedented since the Great Depression.

Long-term unemployment (more than 27 weeks) stands at 5.6 million.  2.4 million discouraged citizens have quit looking for work and there are 9.3 million people working part-time that would like full time employment.

The reported unemployment rate of 10.2% is a 26-year high. For some perspective on the current state of the labor market, today's chart illustrates the unemployment rate since 1948. As today's chart illustrates, today's move above the 10% threshold marks only the second time such a move has occurred during the post-World War II era. It is also worth noting that the unemployment rate has tended to peak shortly after the end of the recession. Following the previous two recessions, however, the unemployment rate kept rising for many months following the beginning of an economic "expansion."

Last year we ran this note and received positive feedback from our readers:
If you are looking for a nice gift to ship to a friend, here is an idea for you http://www.worcesterwreath.com/  This company’s president, Morrill Worcester donates wreaths every year for Arlington National Cemetery.  Maybe a little bit of the money you spend with him will help him continue this philanthropy. Morrill started by giving 5,000 wreaths to decorate the graves at Arlington National Cemetery in 1992

This year Wreaths Across America will decorate 105,000 heroes’ graves all over the world.   You can read about his company’s commitment to our fallen heroes.  Wreath laying day is December 12.

Like many websites, I do business with Go Daddy.  I received a pleasant email yesterday, and thought I would pass along the founder’s tribute to the U.S. Marine Corp. on their 234 Birthday.

Ok, so when the commodities market bursts, then what?  We can't buy houses, because they are continuing to depreciate.  Are we all stuck?  I don't see a good out?  Do you?---subscriber T.M.

Your frustration is palpable.  We are all trapped.  My father is 89 years old. I told him senior citizens with savings are going to be hurt the worst.  The sick thing is, it is planned that way!  Inflation is the easiest tax to enact, because no congressman has to vote for it.  Stay with us, we will offer ideas.  For now, stay with companies that do business in other currencies, and world commodities.---John Dalt

Like many of you, I am going to be busy with Veteran’s Day Observations tomorrow.  Our premium subscribers will be taken care of, and I will prepare an abbreviated MarketToday letter.

I encourage you to call a veteran tonight, visit a retirement home tomorrow; thank a veteran for their service to our country.  They will appreciate and be humbled by your comments, because not enough people do it.  It is the least you can do.

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

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