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The following post is by our new New York City contributor, Cornelius Tacitus, an established skeptic of the half baked and the self serving. Welcome, Tacitus!
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Here’s a chart you won’t be seeing anytime soon from your less than determined financial media sources.
This differs how, exactly, from the usual codswallop passed off as an informative analysis of the US employment situation?
First, this uses the entire data series from 1948 until the present, November 2009. The media love to use very limited snapshots that don’t allow the reader to compare one economic phase with another. Very bad form if you ask me. However, a convenient way of avoiding the whole truth.
Second, Tacitus has taken the data one step forward. The notoriously noisy data for the 5 week and less unemployment was first subtracted from total unemployment, leaving a purer data stream of what me might call real unemployment… the kind that shows up as not merely being between jobs but rather seriously out of work.
Then of course, this was divided by the entire working population to give us the rectified unemployment rate that permits us to make accurate comparisons across periods of growth and contraction, apples remain apples and oranges remain oranges.
As we can see, the previous two worst case unemployment phases were roughly 1975 and 1983, the long remembered misery peaks. However, if you compare the present situation, we appear to be one full ‘click’, or one percentage point of magnitude worse then the previously known worst case since the Great Depression, and there’s no clear evidence that we’ve completed the process.
[Data from Federal Reserve Bank of St. Louis]
Happy New Year.
January 2, 2010 at 6:39 pm
Higher highs, and higher lows. Interesting also to look at the participation rate, which has been trending downward since the 99/2000 bull market peak. Rosenberg points out the decline is most severe for the least advantaged/lowest skilled groups – this is not a case of dotcom billionaires choosing to sit out the downturn.
[IMG]http://i824.photobucket.com/albums/zz165/heraclituso/partrate.jpg[/IMG]
That said, one might consider that the leading indicators from ECRI suggest strong growth ahead, at least for the first part of next year, that ought to feed into a cyclical recovery in job growth (even if the situation is extremely adverse on a long-term horizon).
January 6, 2010 at 4:09 am
I just wonder, at 10%, how long would it take to get back down to say 5%… we can hardly do more than 0.5% (perhaps 1%?) a year… so at that rate, before we get back to ‘low’ unemployment, there will be another recession to take it straight up again. I suspect the times of very low unemployment may be over.
January 8, 2010 at 8:41 pm
It is pretty hairy here in the States. College graduates are taking $7.50 per hour parking attendant jobs, highly skilled tradesmen taking discount store clerk jobs. The labor pool is deeper and more educated than its ever been.
January 10, 2010 at 10:49 pm
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January 23, 2010 at 1:21 pm
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