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“It’s Devastating”: Kashakri Says Real Unemployment Rate Is As High As 24%
“It’s Devastating”: Kashakri Says Real Unemployment Rate Is As High As 24%
Minneapolis Fed president, Neel Kashkari, said that Friday’s jobs report will likely understate the real unemployment picture as it will only reflect people who are “actively looking for work”, a nearly impossible task in a time of nationwide lockdowns, and that the country should steel itself for a “long, gradual” recovery.
“It asks people are you actively looking for work? And a lot of people who have just lost their jobs and were all sheltering in place — they’re not actively looking for work,” Kashkari, who oversaw the Treasury bank bailout program after the 2008 Wall Street crash, said on NBC’s “Today” show.
He said the Friday jobs report that covers April will likely show an unemployment rate of 16% or 17%, but that the real number is around 23% or 24%, adding that “it’s devastating.”
“I’m hopeful that we can bounce back,” he said. “I don’t think we’re actually headed for another Great Depression.”
Kashkari’s comments came shortly before the DOL reported that another 3.2 million Americans had filed initial jobless claims, bringing the seven-week total to a staggering 33.48 million.
Looking ahead Kashkari said the U.S. is likely in for a “long, gradual recovery”, one which if the uber-dove had his way – and he certainly will try – would lead to negative rates, which according to bond king Jeff Gundlach would lead to a “fatal” outcome:
These Trillions Treasury is borrowing is heavily in T-Bills. Chair Powell has stated in plain English he is opposed to negative interest rates. Yet the pressure to go negative on Fed Funds will build as short term borrowing explodes and dominates. Please, no. Rates < 0 = Fatal.
Jeffrey Gundlach✔@TruthGundlach
These Trillions Treasury is borrowing is heavily in T-Bills. Chair Powell has stated in plain English he is opposed to negative interest rates. Yet the pressure to go negative on Fed Funds will build as short term borrowing explodes and dominates. Please, no. Rates < 0 = Fatal.
The Big Lie: 5.6% Unemployment
The Big Lie: 5.6% Unemployment
Here’s something that many Americans — including some of the smartest and most educated among us — don’t know: The official unemployment rate, as reported by the U.S. Department of Labor, is extremely misleading.
Right now, we’re hearing much celebrating from the media, the White House and Wall Street about how unemployment is “down” to 5.6%. The cheerleading for this number is deafening. The media loves a comeback story, the White House wants to score political points and Wall Street would like you to stay in the market.
None of them will tell you this: If you, a family member or anyone is unemployed and has subsequently given up on finding a job — if you are so hopelessly out of work that you’ve stopped looking over the past four weeks — the Department of Labor doesn’t count you as unemployed. That’s right. While you are as unemployed as one can possibly be, and tragically may never find work again, you are not counted in the figure we see relentlessly in the news — currently 5.6%. Right now, as many as 30 million Americans are either out of work or severely underemployed. Trust me, the vast majority of them aren’t throwing parties to toast “falling” unemployment.
There’s another reason why the official rate is misleading. Say you’re an out-of-work engineer or healthcare worker or construction worker or retail manager: If you perform a minimum of one hour of work in a week and are paid at least $20 — maybe someone pays you to mow their lawn — you’re not officially counted as unemployed in the much-reported 5.6%. Few Americans know this.
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