Slow and Painful, Joblessness Could Rise to 13 Percent
“This is going to be the mother of all jobless recoveries,” said Gluskin Sheff & Associates’ David Rosenberg today in an interview. Noting that at the beginning of the year very few anticipated 10 percent unemployment, he now expects a “post-World War II high of 13 percent.” That would be the highest jobless rate since 1948.
He also outlined several other important points. First, he sees the economy as in a secular post credit bubble collapse. Second, he doesn’t believe cash constraints are keeping businesses from increasing employment, he thinks that they are much more concerned about the poor economic outlook. Lastly, he insists that the Treasury, given the record $1.42 trillion budget deficit, is on an unsustainable fiscal trajectory regardless of whether the economy improves or not.
Let’s face it… as challenging as the economy is now, 13 percent unemployment would be much worse. This is one more reason to doubt the American consumer, and the industries he supports. If he stays un- or underemployed there’s no bounce back headed this way anytime soon. More details are available from Bloomberg in its Rosenberg interview on 13 percent joblessness.