US unemployment has now reached 9.8%, and seems almost certain to reach 10% by year-end. In addition, 11 million people have either given up work, or have settled for part-time employment. Thus 26 million are now out of full-time work, 17% of the workforce.
A rise to 10% would also mean, as Goldman Sachs note, that all 8.3 million jobs created in the 2003-7 expansion would have disappeared during the current downturn. And as Barrons, the US investment magazine comment, this will create a further drag on the economy as these people reduce their consumption.
It adds that private employment (eg excluding government) is already 2.6% below the December 2000 peak. And it warns that companies may well try to meet Wall Street's inflated earnings estimates for 2010 by further cutting costs. If they do, unemployment might well rise higher.