The first casualty of recession always falls on employment. As the unemployment rate in the US now shoots up to almost 6.5%, one can try to imagine the awful consequences, especially in the coming year. Yes, there had been bad times in the past, but this time the penalty to be paid by the generally innocent public is going to be definitely beyond common comprehension.

Unemployment worsens recession which in turn causes more unemployment. And the vicious circle continues to lower the standard of living of most people -- nly then can things get better gradually.

Be prepared for a worse scenario, VERY MUCH WORSE.
(Tan Boon Tee)

The monthly employment report is based on two surveys. The payroll numbers, which I cite above, come from the establishment survey of about 150,000 businesses and government agencies. That covers about 1/3 of the nonfarm workforce, and BLS extrapolates its numbers from that.

The unemployment rate, meanwhile, is calculated from a survey of about 60,000 households. So it's a much smaller sample size. But it can catch jobs (self-employed, small businesses, new companies, etc.) that the establishment survey misses.

Second, it's not just job loss this time. The combined loss of asset value (mostly homes, but also stocks) obliquely adds to the feeling of being poor and not in control.

Third, the credit freeze is preventing those with job loss from turning to credit cards (and home equity loans if applicable) from buffering themselves against the prospect of running out of money. Of course, they may have been highly leveraged to begin with, a practice that became far more socially acceptable in this decade than in the past.

It adds up to possibly being worse than simply the loss of a small percentage of jobs. While it's difficult to find sympathy for a group that let themselves become overextended in the aggregrate, it is much easier to feel for them on an individual basis.