Job loss data worse then expected yesterday - is it really that bad?

The job loss data reported yesterday, indicating a supposed unemployment rate of 9.5%, is pretty bad especially given that it masks areas where the actual unemployment is even greater. Comparisons of the jobless percentage as reported by the Labor Department yesterday, with unemployment numbers in prior recessions, is being reviewed in various corners nowadays. Perhaps it will helps us assess the market's likely path going forward, although we must always be cautious to remember that markets can go up when news is bad, just as they can go down when news is good. Also, one of the cycles analysts I track is thinking that the unemployment probably peaked in June, but of course there won't be confirmation of that until numbers continue to be reported over coming weeks and perhaps months. But for a look that includes a number of chart analyses, check out Job Loss Trend Far More Severe than Prior Two Recessions -- Seeking Alpha (by "Sold at the Top", 7/2/09).

The folks at "Chart of the Day" also decided to weigh in on this, and their chart with discussion is below:

Chart of the Day
Today, the Labor Department reported that nonfarm payrolls (jobs) decreased by 467,000 in June. The stock market declined sharply on the news. Today's chart puts that decline into perspective by comparing job losses during the current economic recession (solid red line) to that of the last recession (dashed gold line) and the average recession from 1954-2006 (dashed blue line). As today's chart illustrates, the current job market has suffered losses that are nearly three times as much as the average. In fact, if this were an average recession/job loss cycle, the number of jobs would have begun to increase three months ago.


Journalists and bloggers may post the above free Chart of the Day on their website as long as the chart is unedited and full credit is given with a live link to Chart of the Day at http://www.chartoftheday.com/.

So it's worth knowing this information, whichever way we follow the markets over the coming weeks and months. Which is something we'll be looking at in more detail of course, later in the weekend.

But for now - getting ready for the holiday tomorrow - so I hope this isn't too much of a down note. Again, will "see you later" this weekend!