Unemployment's depth is anyone's guess

WASHINGTON -- The weak job market is expected to get worse, but it's unclear how deep and how long the decline will be, given the extremely uncertain financial and economic climate.

The government is expected to report Friday that employers cut jobs in September for the ninth straight month. Last month, the unemployment rate jumped from 5.7% to 6.1%, highest in nearly five years. A number of economists, such as those from Mission Residential, Moody's Economy.com and Global Insight, predict it will top 7% sometime next year.

Consumers were pessimistic about the job outlook even before the financial package was voted down in the House on Monday. Nearly one-third of Americans said jobs were "hard to get" last month, the Conference Board said Tuesday. That was the biggest percentage since October 2003, when the economy was in the middle of the so-called jobless recovery following the 2001 recession. The poll was taken Sept. 1-23.

Stephen Grubba, owner of Superior Staffing Solutions, a job placement firm in Greer, S.C., says workers are clearly nervous. Grubba has openings to fill, but prospective employees don't want to leave the safety of their current jobs. "They are not going to go unless the company where they are at is having some sort of layoffs," he says.

Paul Villella, CEO of Reston, Va.-based HireStrategy, which does temporary and permanent job placements, says while business has been good but not "great," there is a lot of uncertainty.

"There's a lot of concern and in some regards, fear, but nobody has quite been able to articulate what (the financial turmoil) means for their business, including me," he says.

Job market hard to predict

Some economists, such as those from Mesirow Financial, John Hancock Financial and Action Economics, predict that the unemployment rate, although headed higher, won't hit 7%. But they note it's a tough time to be making forecasts.

"How do you forecast unemployment in the middle of a tornado?" asks Richard Yamarone, director of research at Argus Research, noting that he rapidly is becoming more pessimistic given inaction in Congress and the worsening credit crunch.