The National Bureau of Economic Research, the official arbiters of whether or not the United States is in a recession, finally called it yesterday. That’s not terribly newsworthy considering that everyone knew we were in a recession already.
What’s interesting is that they designated the official recession start date as December 2007, a full year ago. This means that (assuming that the recession didn’t end months ago, which seems pretty safe) this is the longest recession since the 16-month long downturn beginning in July 1981.
Now that we have a start date, we can compare unemployment trends during the current recession to those of recessions past.
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Here is a chart with some
Here is a chart with some earlier data, though not presented as insightfully as the one above.
Unemployment And Recessions
In the 4 Recessions preceeding 1991, unemployment peaked right at the end or just prior to the end of the recession. Two of those were pretty long, though.
I’m starting to wonder if we aren’t looking at a double-recession situation like the early ’80s, except with the longer one first..
Great chart, dude.
The first
Great chart, dude.
The first thing that jumps to mind is that back then, we were more of a manufacturing based economy. The swings in employment tended to be wider but more sharp… when manufacturing slowed people got whacked, and they were quickly hired when manufacturing resumed.
Perhaps now the reaction is squishier in our services and import-based economy, and the post-recession increase in economic activity doesn’t translate as fast to new hiring.
That’s just speculation — anyone have other ideas?
CA just came in at 8.2% and
CA just came in at 8.2% and SD is near 7%. I would think SD has some catchng up to do. The tech sector has just begun their lay-offs. See Adobe, SUN, Yahoo, ebay, etc…
But making comparisons with recessions in recent history is so much conjecture due to the immense amounts of govt manipulation with the way unemployment has been calculated over the decades. If I had to guess, I would think we are much higher than stated.
I was looking at a similar
I was looking at a similar chart about 6 months ago and was quit surprised how easy recessions are to see (and predict) using only employment charts.
To state the obvious: The bowl shape bottom patterns are always followed by spikes upward that coincide with recessions. I’m still a little amazed at the clarity and lack of noise in this chart.
Plug: I’m a big fan of Economagic.com, which provides tons of data and will convert it into chart form for you. It doesn’t look friendly (and has so much data what you’re looking for can be a little hard to find) but it is a wonderful resource.
Thanks for the article Rich, and the chart Sduuude.
If you want to see a very
If you want to see a very interesting correlation between unemployment and housing prices, over-lay these recessionary graphs with house prices in CA. Anything over 7% unemployment really hits the RE prices hard.
I have to say, San Diego’s
I have to say, San Diego’s unemployment rate has been held pretty low relatively to CA and the whole country so far. You would think that since it is the center of the housing bubble, it will be much worse by now. I think the good part is that all the big tech companies (QCOM, BRCM, etc) have a lot of cash before they enter this down cycle. But who knows what will happen if the rest of the state (the country, and the world) keeps dragging downward. Adobe just announced a layoff today.