How low will it go? The third time isn’t charming

In what is becoming a depressing quarterly ritual, I have updated two prior posts on the status of unemployment in the US.  Unfortunately, my initial prediction in April that we wouldn’t see double-digit unemployment has been proven wrong by today’s release from the Bureau of Labor Statistics: it’s 10.2%.

Before we  move on, let’s recap the good news:

• The S&P500, essentially a futures market, hit bottom in February.
• Technically speaking, the recession is likely over given that the GDP grew 3.5% in the Third Quarter.
• Many economic indicators are improving.
• From my current experiences, the job market appears to be loosening up.

Now the bad news.  While the 1981-82 recession had a higher absolute rate (10.8%), we’ve seen more jobs lost in this recession than any other since WWII. The unemployment rate has gone from 4.8% to 10.2% – a rise of 5.4%.  That dwarf’s the 1973-75 recession where the difference was 4.2%.

Here are the not-so pretty pictures.

Unemployment Rate

Change in Unemployment During Selected Recessions

Rise of Unemployment During Recessions

Unemployment During and After Recessions

Prior, unemployment-related posts:

August 2009: How low will it go – Revisited

April 2009: How low will it go

Data sources:

Recessionary Periods; National Bureau of Economic Research; http://www.nber.org/cycles.html

Unemployment Rate; Bureau of Labor Statistics; http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LNS14000000

Dataset

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