Early in 2009, economists projected the unemployment rate would exceed 10% by year-end. By midyear, these economists finally agreed the country was in a recession state. In October, the unemployment rate met expectations as it hit 10.2%, and several states reported rates ranging from 12-16%. The year closed with an unexpected slight decrease in the number of newly unemployed workers filing for state unemployment benefits, and some recent economic indicators suggest the national unemployment rate has now finally hit its peak and the country is creeping toward recovery.
This might seem like good news for the nation. Today, however, the Bureau of Labor Statistics reported nearly 20 of the country's major metropolitan areas have unemployment rates higher than 15%, and 125 report rates higher than 10%.
Another interesting report came on December 31, when the Labor Department reported a decrease in the rate of new unemployment benefit claims filed in the final weeks of 2009. And while the rate of new unemployment claims during these weeks was lower than anticipated, it might seem safe to assume that layoffs tend not to occur at a particularly swift rate when a good percentage of the workforce vacations or celebrates holidays.
It seems premature to assume economic recovery has begun. The housing market has reportedly picked up, although the homes selling are those foreclosed upon as banks finally begin to regain their footing. Holiday retail sales proved disappointing, and domestic automobile manufacturers are still experiencing declining profits. Economists are no longer predicting growth in the unemployment rate, but rather are suggesting there is potential for a "double-dip recession", or another economic downturn immediately following a brief period of growth.
We can expect more layoffs. We should expect this. And by using traditional severance plans, we should expect companies will each waste a few million more dollars.
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