Over 13.2 million people found themselves unemployed as the first quarter of 2009 ended with the jobless rate hitting 8.5 percent. Not only is this the highest unemployment rate since November 1983, but since the start of the year, unemployment has already expanded by 12 percent and more than 66 percent since the same period last year.

Although the current focus on unemployment seems overdone, the pining over of job losses and joblessness are a direct consequence of unemployment’s deteriorating effect on outstanding credit. High unemployment doesn’t just affect consumer confidence; it also affects outstanding credit performance and the collectability of those credit lines.

This close correlation between employment and credit performance is displayed clearly in the recent Kaulkin Ginsberg Consumer Finance Report – reporting for the month of February – where the 61 percent year-over-year increase of the charge-off rate within the Credit Card Performance Index (CCPI) was matched by a similar increase of 68 percent in the unemployment rate for the same timeframe. The charge-off rate for credit cards in the index, 8.43 percent, nearly matches the current unemployment rate.

As of March, the number of unemployed persons had increased by 694,000 to over 13.2 million with a corresponding unemployment rate of 8.5 percent nationally. Although murmurings of economic improvement have begun with guarded optimism that we’ve indeed hit the bottom, the continued loss of jobs will prolong the negative trends seen in consumer credit with mounting charge-offs as just one example.