Jobless Claims: Bad News

Lost in all the blather about the nearly defunct American auto industry was the news today that jobless claims, those people filing for state level unemployment payments, jumped by over 50,000 last month:
First-time jobless claims jump to 573,000, a 26-year high – MarketWatch

There a few salient points here:

First: This is bad news. A jump like this means that last month’s unemployment figures were not an aberration, but more likely the beginning of a nasty trend.

Second: This is the worst data since the bottom of the 1982 recession, which was a very bad downturn.

Third: It is rare for unemployment to rise this quickly so early on in a downturn.

Add these together and today’s news is grim. 1982 was the closest we have been to sliding into a full bore depression since the 1930’s, so we don’t want to see references to it in our current statistics. Plus this kind of news all but assures us that the peak of unemployment this time through will be high: possibly well above 10%, and certainly above the peak of around 8.5% we reached back in … 1982.