Unemployment Soars to 7.6%

Here is the BLS US Unemployment graph with recessions denoted by the cross-hatched areas.

Not much I can add to what is out there except to say that 600,000 jobs lost in January suggests that the downturn is still picking up steam, not slowing down. This it truly frightening, suggesting that we are really truly on the verge of a deflationary episode. The U6 rate which includes under-employed and discouraged workers is at a stunning 13.9%. Based on the increase in national unemployment, we can expect Oregon's unemployment rate to reach at least 9.5% for January when the data come out on Feb 23.

Stories like this one about Washington State Ferry workers agreeing to wage freezes is the first step, the next is wage concessions like this one requested by Eugene's Register-Guard. This is how it all starts, lower wages leads to lower prices which lead to low business investment which leads to lower wages, which leads to.....you get the idea. The problem is that once it starts it is very hard to stop.

We need stimulus now, before it all starts in earnest.