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%.
Vincent Farrell Jr. is chief investment officer for Soleil Securities Group and a regular guest on CNBC and other national print and broadcast media.
Prior to joining Soleil in August 2008, Farrell was a principal of Scotsman Capital Management. Before that, he was chairman of Victory Capital Management of Cleveland and chairman of Victory SBSF Capital Management in New York. He was a founding partner of Spears Benzak Salomon & Farrell, which was acquired by KeyCorp in 1995. Vince held a variety of positions in his 23 years at SBSF, including chief investment officer, and he served as the portfolio manager on a number of the firm's largest client relationships.
Prior to joining SBSF, Vince spent nine years at Smith Barney as a vice president, sales.
Vince graduated from Princeton University in 1969 and received his MBA from the Iona College Graduate School of Business in 1972.