The unemployment went up to 9.6% per DoL but when we calculate it using the employable base before the crash it is above 12%. That is an apple to apple comparison. Thus as expected things are getting worse and yes it is due to the uncertainty and tight money for small business. For the large companies it is almost a time of free money if they know what to do with it, like refinance their total balance sheets. Yet if we also see some short term deflation, than 4% interest with a 2% deflation is a 6% interest rate, possibly not so good at that.
The employment change per month still shows a growth in Government employment and declines in the "hard production" parts of the economy.
We still are concerned that almost a third of the employment is in tax supported jobs, government, education and health. The Government expansion continues but the hidden concern is as we had stated earlier in higher education with the bubble in tuition rates. This will drive students away and ultimately collapse any long term recovery.
The above comparison of 2005 to the present shows the growth in the tax supported businesses. Only Professional and Leisure have shown an improvement percent wise. The real issue is the explosion in education, most likely funded by Stimulus funds which just adds a dramatic long term burden on the states and local tax bases.
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