Chart of the Day: How Does Unemployment Compare To Past Cycles?
This comes via Economix:
The writers there have a two related pieces (with equally revealing charts) that I recommend reading:
I guess this is why they call economix the dismal science, huh?
About Edward Harrison
- Unemployment claims falling faster than in half of past recessions 27 Aug 2009
- Chart of the day: change in unemployment 5 Sep 2008
- Chart of the day: unemployment as a recession indicator 12 Sep 2008
- Unemployment claims lowest in 15 months 25 Nov 2009
- Unemployment: U-6 data versus the Great Depression 3 Apr 2009
Mr. Harrison,
Thanks for the great, but sobering chart. I’m wondering if any of the “experts” are really being realistic about how long it will take the labor market to recover. Looking at the information in your chart, even if we were to suddenly find ourselves in a miraculous V shaped recover, it would take about 24 more months to get back to 2007 numbers.
Since the likely hood of that is pretty dim, 5 or more years seems more realistic. Are any policymakers really grappling with the social and economic implications of this kind of long term high unemployment and the distinct possibility that a large group of people who have been unemployed for so long may become permentantly unemployed?
Best,
J. Becker
J,
If you listen to most economists parse the data, they all say that we are looking at 5 years minimum to get back to full employment. The reality of this is that it puts the economy at stall speed, such that it is more prone to recession and that certainly makes 5 years a very optimistic scenario.