Real Unemployment Could Be 25% By Mid-year 2010

John Lekas, senior portfolio manager for the $320 million Leader Short Term Bond Fund, says that the real unemployment number could go to 25% by mid-year. This number includes everyone – even the underemployed now working multiple part-time jobs (if they are lucky enough to find them) to pay bills.

Lekas says, the average American family earns about $300 per month less than their bills and this number has been relatively constant for the past year. He stated “Plus, an in-house compilation of household data shows Americans are under water, with unpaid bills and expenses outpacing income by hundreds of dollars a month. That should keep consumer spending down, which means less sales for companies and, thus, less incentive for them to add to payrolls.”

The headline unemployment number (U-3) reported at 10% in February could surge to 16% by mid-year 2010. While the real (U-6) unemployment rate now at 18% could go to 25% by July 2010.