June Unemployment inches up to 9.5% – or is it really 16.5% – what will you give me for 20.6%!

I don’t want this to seem like over-kill but I really believe it is important in light of our last blog.  If you have been following our program at all then you know that we are pretty conservative when it comes to evaluating this market.  You also know that we believe we are on the verge of another large wave of foreclosures that will hit at the end of this year and throughout 2010.  A key driver of that foreclosure wave will be unemployment.  But, you say, unemployment is showing signs of slowing down – is it really? 

That all depends on what numbers you really want to believe.  You see the government has changed the way it calculates unemployment over the years.  It’s really hard to know exactly what part of the unemployed sector is included in the calculations.  For instance the current number does not include “discouraged workers” who are unemployed.  What is a discouraged worker?  It is an unemployed person who has given up looking because they have not found anything for the last 6 months.

If you include that sector which is called the “U-6” measure of unemployment, then the June number of 9.5% jumps to 16.5%!  Also this number does not take into consideration those who have been out of work for longer then six months.  If you include all who have been out for at least 12 months then the June number jumps to 20.6%.   Check out this blog in Investment Watch for more details.

Oh yes, and I forgot to mention that our current numbers only account for those laid off from jobs but does not account for people who have lost work because their own businesses have failed or had to be closed down.

The bottom line is, any way you cut the number, its bad!  And this is a big part of what will fuel this pending foreclosure surge.  That’s why we are buyers in this market – don’t sit and watch it – come join us!