Not Something I Wanted To Be Right About

Last week I noted the drop in continuing unemployment claims after months of record increases. I said then that the drop had to have been not from people finding work, but from people exhausting their unemployment benefits.

Barry Ritholz has the numbers that unfortunately corroborate my theory.

Those of you (who can still afford the luxury of) a trusty Bloomberg will note the ‘exhaustion rate’ for jobless benefits - EXHTRATE – reveals that people are not leaving the pool of continuing unemployment claims because they are getting new jobs; Rather, they are leaving because they have exhausted their benefits.

They are now unemployed AND broke. That is hardly a green shoot . . .

And it's going to get worse. We've reached a breaking point. People are still losing jobs at a staggering rate, still 600,000 new unemployment claims plus each week. But more people are falling off the unemployment benefits rolls to boot. They're ending up in the darkest corner of the U-6. It will be hell getting out.

I was in a very similar situation after the dot-com bust/9-11 recession in 2002. I know what it's like, and it was the grimmest time in my life so far. I'd never want to go back to that point. It is hell.

Thousands more are entering this hell every week. Many will make it out, but in a paycheck to paycheck world, many more will not. They will slip beneath the cracks, under the waves, and they will pass silently, ghosts in the realm of the living.

Pray for them. Odds are pretty good you know one of them.