This past weekend I was in the bookstore perusing a certain paperback, when a store clerk passed by. She asked if those were my books stacked beside me on the reading bench.
I smiled and told her, "No. That's a high stack."
She nodded and said politely, "I wish people would actually buy them. That way I'd get more hours."
"Yes," I said, even as I held a book that I didn't intend to buy.
The clerk's remark about needing more hours reminded me about the real employment picture, not just the one represented by the recently announced 8.3 percent official jobless number.
When you add the under-employed plus people who've stopped looking, the broader unemployment number (known as U-6) is 15.1 percent.
In his February 2 appearance before a House committee, Fed Chairman Ben Bernanke said, “Particularly troubling is the unusually high level of long-term unemployment.”
But there's more. The New York Times reported (1/31) that the Congressional Budget Office said the jobless rate "...will climb to 8.9 percent in the last quarter of this year...and will rise to 9.2 percent in the final quarter of 2013."
The same article included this quote from the director of the CBO: "We have not had a period of such persistently high unemployment since the Depression.”
The unemployment rate during the Great Depression climbed to 25 percent, and that period was deflationary.
Take note: there's an eerie similarity between what is developing economically today and what happened from 1929-1933:
The economy is clearly vulnerable to a debilitating wave of debt deflation. The threat is approaching quickly from an important source: Europe. The same sequence of events occurred in 1929, when deflation started overseas before lapping onto U.S. shores...At the time, economically-weak Germany was the equivalent of today’s so-called PIIGS (Portugal, Ireland, Italy, Greece and Spain)...
....A similar sequence is playing out now, and, so far, it’s taken about the same amount of time.
Financial Forecast, January 2012
If the Great Depression parallel mentioned above continues to play out, how much time remains before Europe's crisis spreads across the Atlantic? The January Financial Forecast addresses that question, and the recently published February issue presents probing analysis under the sub-heading "Europe's Last Gasps."
As the deflationary trend deepens, the 9.2 percent jobless rate projected by the CBO for Q4 of 2013 may in retrospect look optimistic.
It's time to read our independent economic analysis. We bring you a perspective you simply will not find anywhere else.
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