This week two popular measures of unemployment were reported: weekly unemployment claims (608,000) and the four-week moving average of unemployment (615,750). Both showed that the number of people applying for unemployment insurance had dropped week over week.
Source: Unemployment Insurance Weekly Claims Report – Initial Claims
The previous week, another popular measure of employment — the civilian unemployment rate–jumped to 9.4 percent from 8.9 percent.
Source: The Employment Situation – Civilian Unemployment Rate
One number that is rarely reported in the popular media is the actual number of people who are unemployed. You might be shocked to learn that the number of unemployed workers soared to 14.5 million in the most recent report. This compares to 13.72 million the previous month, and 8.5 million a year earlier.
Source: The Employment Situation – Unemployed
So while the more popular reports seem to be indicating that the employment situation is improving, the raw numbers show that more and more Americans are out of work. In fact, this is the largest number of unemployed since this statistic began to be compiled in 1948.
Another sobering statistic is the number of Americans who have been unemployed for 27 weeks or longer. This number rose to 3.95 million in the latest period, versus 3.68 million a month earlier. In 2008, the number for the comparable period was 1.57 million.
Source: The Employment Situation – Civilians Unemployed for 27 Weeks and Over
Those investing in stocks should take a good hard look at these numbers. The story they are telling is that the economy is still at risk. While things might not be as bad as they were a few months ago, they are still very bad in historical terms.
It is often true that the stock market discounts all the bad news before it happens. But the question still remains, has the market discounted the worst of the news, or is the worst news still to come?