So unemployment is considered a lagging indicator to economic recessions and subsequent bounces/recoveries. We've stated multiple times that the US economy depends roughly 70% on consumer spending. And we've exhausted the discussion of how the consumer is saving more/spending less whether due to fear, unemployment, debt burdens, lost equity in their homes, or whatever the case may be.
So here's a purely interesting thought to follow on the heals of those naked truths. State unemployment benefits are currently providing claimants with about 52 weeks of support and unemployment checks before (Atlas) shrugging them off onto their own devices. Consider that this time last year was went unemployment really started to pick up steam, with the major major monthly unemployment reports (some in the high 600,000 coming in the time period of November through February-ish.
Couple this with the fact that we're STILL LOSING JOBS. That unemployment (in its true lagging nature) is still rising and that jobs are not being created (let alone is it fair to assume that once the losses stop that creation will ramp up anytime soon).
Its not a secret that the result of this is going to be either: (i) more government extended support (and the debt burden that comes with that); or (ii) another incentive for consumers and the public to spend even less and save even more.
What's worse for our gluttoness, consumer-dependent GDP economy than 9.7% unemployment?
9.7% of the population being unemployed without even a government assistance paycheck coming in.
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