Farrell: Good News on the Jobs Number?

This commentary was originally posted on RealMoney by Vince Farrell.

To add a little to the headlines -- the loss of 240,000 jobs last month was a good bit worse than the consensus, as we feared. 6.5% unemployment is greater than the peak of the last recession, and we'll go a good bit higher. Keep in mind the jobless rate reached 9% in 1975, 10.8% in 1982, and 7.8% in 1991. I would guess we will go to 7.5% this time. The reason for a lower peak is that after the setback following the Internet bubble collapse of a few years ago, we had a "jobless" recovery, with additions to the workforce at half the normal pace. Payrolls are leaner with less room to cut.

The number of jobs lost for the prior two months were revised down by 179,000, so total job losses for the year are now figured at 1.18 million; half of those losses came in the last 90 days.

The speed of the decline should come as no surprise. There will be a lot more bad news to come. The third-quarter GDP will be revised down from the initial report of -0.3%. Fourth-quarter GDP will show the biggest impact of the crisis -- estimates range from a decline of 2% to a decline of 4%.

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