Monday, February 9, 2009
Percent Decline in Payroll Employment from Peak Month
Here is another graph following yesterday's Stimulus now or jobs later blog.
Green(July '74), Blue(March'80) and Red(July'81) look like nice V-shaped recoveries and the current Stimulus hopes to emulate this V-shaped recovery. However, the March '80 recovery, as quick as it was, another downturn started only 4 months after returning to peak employment and lasted twice as long as the first one, another 27 months. By most economists' projections, the current Stimulus is not enough for a full recovery. If these economists are correct, we'll recover, hopefully to peak employment, and then start shedding jobs again as the economy will not be stimulated enough. When this money runs out, we'll repeat the W-shaped recovery much like the '80 '81 recession, with the second leg of the W lasting twice as long.
But here's another graph that interests me.
This is the Unemployment data from Bureau of Labor Statistics going back ten years. Looking at this makes me wonder if we really recovered from the Feb '01 recovery? The Feb'01 recession may have reached its previous peak employment, but doesn't look like it accounted for the increase in population as unemployment fails to reach below 4%. What does this mean? I'm not sure, but only time will tell. Perhaps we can look back when our teeths are falling out and talk about the good old times.