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Tuesday, March 17, 2009

 

depression employment curve, revisited


following on an earlier posting, justin fox of time's curious capitalist compares employment data across recessions. this is the worst recession (indeed the first depression) in the united states since the 1930s, but it does not compare to the 1930s -- at least not yet.

for so long as the government steps into the breach to maintain demand, it will be extremely unlikely that it will turn into such a thing. but there's a lot of story left to be told on that count.

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Hello:

I really don't know how they tracked unemployment then (1930s) but I do know our figures today, figures used in this Time piece are as cooked as Enron's books.

http://www.netcastdaily.com/broadcast/fsn2009-0314-2.asx scroll to the 42 minute point +/-. Williams of www.ShadoStats.com says we are 900,000 to 1 million a month.

That said I think a redraw of this chart would make it look very ugly.

Take care

 
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Davos, fox does a good job comparing not unemployment rates (which have several assumptions built in) but instead numbers employed -- a far less massaged number. and though i think its obviously true that tracking employment does not differentiate between people in their old jobs and those now in part-time or reduced-hours positions, the same effect was seen en masse in teh depression too.

i think this is really as close as one can get to an apples-to-apples comparison across the gulf of 80 years.

fwiw, while i think u-6 could very well reach 20% before this is over, that is a likely outcome ONLY IF government refuses to step into the breach and sustain demand through fiscal stimulus, recirculating private savings and debt paydowns as japan did from 1990-2005. we COULD negotiate this entire depression with a much more minor employment problem than the 1930s (eg something similar to the early 1980s) with a GDP retracement of less than (-10%) provided we have the political will for fiscal stimulus.

 
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