Employment Woes
The recent publication of the unemployment numbers for February was indeed sobering, with the number of unemployed over 16 years of age exceeding 12 million, and breaking the previous record high of 12.05 million, set in December of 1982. Given some expected delay before the impact of the stimulus package is actually felt, it would seem we are due for some worsening in the job markets before any turnaround can be seen. The following time series provides a seasonally adjusted estimate of the number of unemployed over age 16, since 1980, using data published by the U.S. Department of Labor: Department of Labor Statistics, last updated on Friday, March 6, 2009.
The steepness of the recent rise in unemployment is quite breathtaking and remarkable. Considering that the duration of the last three spikes in unemployment, exceeding 8 million unemployed, was about 3 years, we see little relief on the horizon. A naive forecast would suggest that the unemployment number will peak in March or April of 2009, but remain above 8 million until about the fourth quarter of 2011.
The civilian unemployment rate which is of course estimated as the ratio of unemployed to the total pool of civilian workers shows similar behavior. In the graph below from the St. Louis Federal Reserve Bank, the civilian unemployment rate is shown with periods of recession highlighted in gray. Note that the periods of very rapid increase in the unemployment rate are practically the same as the U.S. recession periods.
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