Employment Situation Summary Report: Another Step Toward Double Digit Unemployment

Nonfarm payroll employment declined sharply in December, and the unemployment rate (U-3) rose from 6.8% to 7.2% , the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Payroll employment fell by 524,000 over the month and by 1.9 million over the last 4 months of 2008. In December, job losses were large and widespread across most major industry sectors.

Other takeaways from the report?

• U-6 is now at 13.5% and rising
• Although many reported that initial claims for state unemployment insurance benefits fell 24,000 to a seasonally adjusted 467,000 in the week ended Jan. 3, coming well below market expectations for 540,000 new claims, the perception that this news is positive is flawed (as were the estimates themselves). Intial claims may have come in below expectations, but that fails to consider those that delayed making such claims in light of the holidays.

Unemployment will continue to march toward double digits.