Double-digits

Unemployment sails over the predicted high for 2010. The ever-reliable mainstream economists were forecasting an increase to 9.9 percent… and I’d encourage you to stop and think about why they might have assumed that. Remember, Keynesian economics is all based on psychology.

Unemployment Rate Rises to 10.2 Percent
The nation’s unemployment rate rose above 10% for the first time since 1983 in October, a much worse jump than expected as employers continued to trim jobs from payrolls…. According to a survey of top forecasters by the National Association of Business Economics last month, the consensus estimate among economists was that unemployment would hit a high of 10% in the final three months of this year and the first quarter of 2010.

Expect a lot of happy talk about how unemployment is a “lagging indicator”. Anyhow, the employment-population ratio is down to 58.5 percent and U-6 is now 17.5 percent. I will be very surprised if U-3 does not exceed 12 percent in 2010.

Karl Denninger reminds us that the consensus forecast for 2009 was 8.4% and breaks it down at the Market Ticker with the help of this graph.  He’s looking primiarly at loan losses while I’m looking at declining bank credit, but the perspective is the same.