Jan 24 2010
Last month, as was noted here and many other places, the national unemployment rate ‘stayed the same’ only because the workforce had shrunk due to so many people giving up on finding jobs. If a consistent workforce level had been used as the basis of the national numbers we would be closer to 11% instead of holding near 10%.
But while this statistical mirage gave a temporary appearance of a healing economy, the facts on the ground portend a worsening situation. Two other indicators on unemployment have taken a turn downward while the national mirage was fooling the left into underestimating the national mood, which came spilling out with a vengeance in Massachusetts last week.
In December the nation hit another record in terms of economic problems. 2 more states were added to the list of states now suffering greater than 10% unemployment (New Jersey and Mississippi). Â That brings the total to 17 states now struggling with unbearable economic hardship – both at a personal level and at a state level (click to enlarge).
Even worse, of these 17 states 15 saw their unemployment situation worsen in December. Does anyone see any reason why this picture would have turned towards the better in January?
Another key indicator that the unemployment situation is worsening is the fact that the rolls of the Emergency Unemployment Compensation (EUC) program continued to swell in December at an alarming rate (click to enlarge).
The EUC is the last vestige of help for the chronically unemployed. The EUC rolls expanded by Â a staggering 775,880 people in December. If the economy was creating jobs it would clearly be shown in a reduction in EUC rolls, not these massive increases. In the 2/21/10 report on unemployment (which showed a surprising rise in first time unemployment claims for that week) the government reported that +652,364 were added to the EUC (completely wiping out the gains made the previous week).
The fact is the EUC rolls are exploding. In November there were +604,209, up from +272,185 in October. Decembers new +775,880 was followed by the +652,364 in the first week of January (which was higher than the entire month of November!). It will be well into February before we see how bad it is right now (two week lag in EUC reporting), but right now January will easily outpace December, which outpaced November, which outpaced October, etc.
Since the stimulus bill was passed last February, 4,185,887 people have fled to the EUC rolls, an increase of 285%. This is as good a measure of the failed stimulus bill as any other out there. President Obama is going to give the State of the Union speech next week, and the week after that will come the January jobs news, which I doubt will be good and could be really, really bad.
President Obama went way out on a limb by pushing a radical agenda over the last year and focusing on health care while the liberal stimulus program crashed and burned. The stakes were huge, even though I doubt he and his young team ever understood how huge. Success would be historic, as is the now evident failure. He put all his capital in hoping the economy would turn around while he fiddled with health care.
He was wrong. How wrong we be quite evident very soon.