Friday, March 4, 2011

Unemployment Falls to 8.9%...Or Rises to 12%, Depending On Who Is Counted

8.9% is the lowest rate since April, 2009.  That's the same month, coincidentally, that the "Great Recession" technically ended.  However,  Gluskin Sheff's David Rosenberg points out that 700,000 folks are no longer counted as unemployed b/c they've stopped looking for work.  And if they were, the U-3 unemployment number  would be 12%.
See giant version of chart.


The National Economist said...

things are looking pretty bad

Montpellier said...

It is really quite remarkable how much worse this employment dip is than anything else in meaningful living memory (only 1% of the population now alive was born at or before the beginning of the first Great Depression).

I raise this point because numbers are relatively meaningless to most of us - rather, it's our emotional responses to our personal experiences which shape our reactions to things. I grew up in the stag-flationary 70s, and I've got an inherent bias and expectation of inflation (and a resulting love of real estate as a hedge).

I also share the same emotional response to the notion of policy induced recessions - after Volcker, I don't fear them but instead see them as a relatively safe (short-term pain) way of correcting the economy. Of course, when you look at the scale of the '80 and '82 recessions - the deliberate policy-induced (austerity) ones, they're small potatoes relative to what we are experiencing now.

I think you're point about the uncounted is definitely worth noting, and suggests that this may ultimately have a very different impact on people than we currently imagine.