George S. May Business Blog

Unemployment has fallen and it can’t get up; All time lows may erase an entire decade of improvement

The Bureau of Labor Statistics employment report will be released shortly and it won’t be pretty.

It is expected that the report will show 363,000 jobs were eliminated. If so, that will mean 131.8 million people are currently working in the United States, the same number as May of 2000.

So what does that mean?

Well, as Forbes put it “If another million jobs disappear by the end of the year–likely, without unexpected improvement–an entire decade of employment gains will have been wiped out. In January of 2000, there were 130.8 million jobs in the country.”

 According to an economist for the Economic Policy Institute, the labor force has grown by nearly 13 million people, so having the same number as in 2000 is far from breaking even.

Even the most negative assumptions from economists across the nation are getting outdone on a regular basis.

“In December, the Blue Chip consensus, a survey of many leading economic forecasters, pegged unemployment for 2009 at 7.8%. Even the 10 most pessimistic Blue Chip forecasters had an estimate of only 8.3%. By March, even the pessimists’ estimates for the entire year had already been shredded, when unemployment reached 8.5%.”

It must be said however, that many are predicting the economy to start growing in the second half of 2009 and as a result we might barely miss losing an entire decade of improvement.

“The intensity of the post-Lehman hiring freeze is easing,” says Ian Shepherdson, chief U.S. economist for High Frequency Economics, in a note. Shepherdson predicts only 250,000 jobs lost in June, significantly better than the consensus. “The labor market still stinks, but we think it will be less bad than expected tomorrow.”

Wow, who would have ever thought we would be saying that the fact that the United States will see a quarter of a million people lose their jobs in a month is a good thing?

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