Job losses are not catastrophic

November job losses were much worse than expected, but when put in an historical perspective, the current situation is hardly as bad as the distressed pricing of equities and corporate bonds implies. That the market has not collapsed on the news of job losses exceeding half a million in one month is simply confirmation of how awful the market's view of the economy has been. The market has been priced to a depression for the past several months, but to date the job losses in the current recession are about on par with what we saw in the last recession, which was a fairly mild one. That's not to say things won't or can't get worse, simply that one needs to be careful to filter out the media bias which is quite prone to exaggerate any bad news.

Note in the second chart that weekly unemployment claims as a percent of the workforce are not yet higher than they were in the past recession, and still only half what they were in the 1981-82 recession.