A jobless recovery is like a topless bar where the girls don't take off their clothes. What's the point? The unemployment rate is the ultimate Washington lie. There's simply no way to monitor the tens of thousands who've simply stopped looking for jobs. (I know several acquaintances, and hope not to become one). What would be the unemployment rate if it accounted for these folks? 10%? 15%? The government refuses to confront the real issue of American jobs going overseas to areas of lower employment costs. As far as ACG is concerned, any bond sell-off is not sustainable until we see real growth in non-farms. I'm talking 3 or 4 consecutive months of 200,000 or more. Seems very unlikely.
As a conservative rule of thumb, I have always used 40% as the overage on the "official" unemployment rate to encompass discouraged workers and those who abandon initial plans to enter the workforce(students staying in school, housewives staying home, etc.) during periods of job contraction. That would put my revision of the rate to a level of 8.4%. I should also point out that since unemployment is a lagging indicator, even though GDP has shown signs of recovery, we would still be within the period of job contraction for purposes of this exercise.