Friday, June 3, 2011

This Time IS Different... Employment Edition

Not different from past financial crises, but certainly different from recessions over the previous 40 years.

The first chart should look similar to other charts presented on the blogosphere. It shows the change in the total number of employed during past recessions. The key takeaway... this time is worse, but things are improving (albeit slowly).

The next chart shows how much worse. It takes the same data as the chart above, but shows the relative performance of this recession as compared to past recessions. For example, as compared to the last recession we are now trailing the employment situation by about 6.5% (we currently have 4.5% less jobs than our previous peak, while at this point following the 2001 recession we had 2.1% more jobs).

The concerning thing is that things seem to be getting worse, even though it "should be" easier to improve following a severe downturn (hiring back workers is typically easier than creating new jobs).

Seems more and more like a structural issue that cannot be addressed by simply trying to stimulate aggregate demand.

Source: BLS