Job Losses in Historical Perspective

(Chart from Calculated Risk)
https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgTZge23cQH9a368xOZ8kKnCHJWya6_vU_UJ43SZX5n9Rlq1dcBrts2CxE8SejyTCG6glJ9YTJu8WLjgve_maot_ONu25s_kh2VMxEJo_FZ3cb4y8gktb_qrrsToc-f40LVdIg3gGwi1_I/s1600-h/EmploymentRecessionsDec.jpg

The official unemployment rate still isn't quite what it was back in the early 80's. The problem is the Govt reports unemployment differently now than in the past. As a result it's difficult to get a real measure of where we are at in job losses. One way of looking at the numbers is to look at the percentage of jobs lost compared to the total available workforce. People graduate, leave home, die, get sick, become disabled and so on. The work force number is not stagnant.

This chart looks at unemployment through job losses as a percentage of the total labor force going back to 1948. What is particularly noticeable about the current recession is:

Duration - during most recessions we'd already recovered the lost jobs by this point.

Severity - now slightly deeper in losses since WW2.

Bottom - we haven't seen the bottom yet.

Shape - this isn't a V shaped job loss scenario on a chart. the pattern looks more like a U shape. A "V" shape gives us a definitive point to look at as the bottom. A "U" indicates a longer duration. The last 3 recessions have been "U"'s and are the longest running. The deeper bottom of the U might indicate a much longer recovery length.

It is possible the current recession will resemble the 1958 and 1974 recessions. If so, there is still no indication of a bottom and if we are at the bottom, we would still be looking at a couple of more years of difficult unemployment.