They were polled and that’s their number. Personally, I think 9.8% is a rosy prediction. More on that later.
The unemployment rate will peak at 9.8%, according to their median forecast, up a full percentage point from the prior survey in January. Twenty-one economists predict the unemployment rate will top out at 10% or higher, according to the survey of 51 economists by USA TODAY April 16-22.
Economists also predict the jobless rate will rise for a longer time. Two-thirds say it won’t stop rising until 2010 or later, vs. 51% in January.
The unemployment rate in March was 8.5%, the highest in a quarter-century. The rate of underemployment â€” adding in part-timers who wanted full-time work or those who had stopped looking for a job â€” hit a record 15.6%.
So yes, I don’t think we’ve hit bottom yet. Why? Well, I’ve pointed out a few times now that the sub prime mess was only the beginning and a lot of other loans are just start to default. So the pain is far from over and that could have a similar cascading effect through the economy it did last fall. Not nearly as bad, but similar.
Also, we can’t ignore that underemployment number of 15.6% because that’s the true gauge of our collective financial health. If that many people want full time jobs, but can’t get them, we’re looking at a serious reset of the economy. Because that number isn’t likely to change to terribly much. In fact, I bet it’ll get more stable, even if the unemployment number goes down. Why? Because businesses will only be offering part time work because that’s all they can afford. So perhaps the 8.5% will peak and then start to go down, but we have to keep our eye on that underemployment number.