Monday, November 9, 2009

The business cycle always has an ebb-and-flow to it. The unemployment rises quickly during the onset of recessions and jobs are added back at a fraction of the pace from which they were taken away.

If you look at the jobless rate during the last 40 years, there were 6 distinct cycles of increases in the jobless rate and the related improvement in the economy. (1969 to 1973, 1973 to 1979, 1979 to 1989, 1989 to 2000, 2000 to 2007 and 2007 to the present (October 2009).

As you can see below the current Great Recession (Green Line) has taken unemployment to the highest point since the 1980's and it has done so at a faster pace.

Click on Images for a larger image

If you just want to concentrate on the change in the unemployment rate, you can see that this recession (Green Line) has risen from the trough at the fastest rate we have seen.

If this recession is going to have the duration of hard-times seen in the 1980's the peak unemployment rate won't happen for another 11 months (September 2010)... And worse yet, you can see from the chart that it usually takes 5 - 6 YEARS before enough jobs are created to bring the unemployment rate back down to pre-recession levels.
Click on Chart for a Larger Image

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