James Pethokoukis, a Reuters blogger, has a post based on an analysis by economist David Rosenberg suggesting that official unemployment may go well above 12% -- this means that real unemployment that includes those who have given up looking for work and those severely underemployed may hit 20%. Here is part of Pethokoukis' take on this forecast:
Optimists, Rosenberg explains, underestimate the incredible damage done to the labor market during this downturn. And even before this downturn, the economy was not generating jobs in huge numbers. If he is right, all political bets are off. I think the Democrats could lose the House and effective control of the Senate. I think you would also be talking about the rise of third party and perhaps a challenger to Obama in 2012.Read the entire post by Pethokoukis. The implications of this, if it is true, will go way beyond simple politics.
The national unemployment rate cracked 10 percent for the first time in 26 years.
There's no doubt it has gotten much worse.
I fear unemployment will get worse. Consumers are still cautious about spending and there isn’t much help to launch and grow new businesses. One of two things happened to many jobs: either a business was no longer able to survive in the recession and had to shut down taking the jobs with it, or a business had to scale back employment to adapt to the lack of revenue to cover costs. The job market is shrinking and some big businesses are still barely standing. If one of these big businesses, GM, falls then we can expect things to get even worse. I do not support government taking over businesses to keep them afloat, but the big question is can the U.S. afford to let them fail or not? It will be ironic if the day comes we have to leave the U.S. in order to find work.