The numbers coming out of the US labour market are just appalling. The unemployment rate is now at 9.5 percent. This is the second highest level since the second world war. The highest point was 1982, when the rate hit 10.8 percent.
However, that peak could easily be exceeded by the end of this year. For the last 8 or so months, the US economy has been shedding around half a million jobs a month. June was no expection.
Moreover, the rate of job loss is unprecedented. In only 18 months, the US econmoy has shed 6.5 million jobs. Since May 2007, the unemployment rate has increased by a full 5 percentage points.
Remember, the US has only a limited social safety net. There is no kindly and generous public sector to break the fall from employment to unemployment.