30 years of Unemployment Data

This morning I wanted to look at the last 30 years of unemployment rate data. As you can see below from the chart from the bureau of labor statistics, there have been essentially 6 different peaks of unemployment during the last three decades.

What I wanted to compare was the trough-to-trough paths of unemployment rates during different recessionary periods (See Chart below).
Click on Chart for a Clearer Image

There are a few items of interest to me:

1) Typically, the unemployment rate rises faster and quicker than what it falls.

2) The worst unemployment seen in the last 3 years was 10.8% in late 1982 (Red Line)---And it took over 6 years for the unemployment rate to drop to cyclical lows in 1989.

3) The current recession (Green Line) has seen the quickest, steepest increase in unemployment of any of the six past cycles during the last 30 years. In 26 months, the unemployment rate has increased 5 percentage points. The previous cycle ranged from 1.6 percentage points to 3.6 percentage point increase in 26 months, with an average of 2.3 percentage point increase. That means that this recession has seen the unemployment rate increase 2x's the average rate during the first 26 months.

The chart below shows The Change In Unemployment Rate for the same cycles---since the chart above shows the actual unemployment rate, it's difficult to gauge the change in unemployment rate. The chart below more clearly shows that this recession has seen unemployment rates jump quicker than an other recession in the past 30 years and is just a few basis points away from being a bigger increase than what was seen in the early 1980's.

And you can rest assured that with the additional layoffs coming from GM, Chrysler and their dealers, the unemployment rate will cross 10% and be worse than the recession of 25 years ago.

Click on image for a bigger chart