Unemployment might be peaking sooner than you think

Although I am more bearish in my GDP forecast than many others (see these posts), I don't believe that should necessarily translate into unemployment peaking in the mid-teens. See this graph (click to enlarge) :

Using this transformation of the data, since the growth in initial claims for unemployment insurance has peaked, the unemployment rate could follow soon. How slowly it will go down is another question.

Bloomberg links: Fed Watch

Fed Faces Biggest Blow to Authority, Independence in Dodd Banking Measure The Federal Reserve faces the biggest blows to its authority and independence in five decades under legislation championed by its lead overseer in the U.S. Senate.

Fed Officials Say Recovery Will Be Slow as Unemployment Hampers Spending The U.S. economy will be slow to recover from the deepest recession since the 1930s as rising unemployment curbs consumer spending, Federal Reserve officials said.

Fed's Lockhart Says Banks' Commercial Real Estate Losses to Slow Recovery Federal Reserve Bank of Atlanta President Dennis Lockhart said the economy will probably recover slowly from the deepest recession since the 1930s because of rising bank losses, especially in commercial real estate.