Adjusted for the Growth in the Labor Force, Jobless Claims Are Below the 1990-91 Recession
ASSOCIATED PRESS -- The Labor Department reported today that initial jobless benefit claims rose to a seasonally adjusted 589,000 in the week ending Jan. 17, from an upwardly revised figure of 527,000 the previous week. The latest tally was well above Wall Street economists' expectations of 540,000 new claims. The total matches a 26-year high reached four weeks ago. The last time claims were higher was in November 1982, when the economy was emerging from a steep recession, though the work force has grown by about half since then.MP: The chart above from 1987 to 2008 shows why comparisons of unemployment claims today to past years are meaningless, without adjusting for the change in labor force. In the last 22 years, the U.S. labor force (blue line) has increased by 30%, from about 119 million in 1987 to more than 154 million today.
The chart below shows initial jobless claims as a percent of the labor force, to adjust for the increase over time in the population and labor force. December's 0.355% level (549,000 average weekly claims / 154,447,000 labor force) is above the 0.333% peak at the end of the 2001 recession, but still way below the 0.3915% peak of the 1990-1991 recession. (Note: The January labor force number has not been released, but the average jobless claims so far in January (522,500 on a 4-week moving average basis) are actually lower than December's 549,000 number, so the January figure for jobless claims as a percent of labor force could be lower than December.)
Bottom Line: Adjusted for the size of the labor force, unemployment claims haven't even yet reached the level of 1990-1991 recession. So before we make exaggerated claims of the "worst economy since the Great Depression©" we might first make comparisons to the 1990-1991 recession, and it's still not yet as bad today as it was in the early 1990s. Calculated Risk uses a longer dataset that includes the 1970s and early 1980s, showing the same thing - we've got a long way to go before today's economic conditions come close to matching previous recessions of the 1970s and 1980s.
11 Comments:
Hmmm, I wonder if this takes into account the 5 Percent of Labor Force Are Illegal Immigrants (per NPR) or so of the work force that are illegal aliens?
I will be much more optimistic when the rate of change in unemployment slows down.
I guess that means Obama is already an effective President. Reversing the rising trend of unemployment.
What difference does it make if this is worse or better than the 80s in terms of indicators? The bottom line is that it sucks for some people - and that number of "some" is increasing. So instead of arguing that we're not in bad shape right now - why isn't Mark offering solutions? Is Mark saying this relatively high rate of unemployment ISN'T a problem? Perhaps because it's easier to deny a problem exists than it is to solve it - you can't be wrong if you've always got your head in the sand. Or in the case of Carpe Diem, head in historic Sears catalogs.
"So instead of arguing that we're not in bad shape right now - why isn't Mark offering solutions?"...
Why aren't you michael?
Not to worry though, your inability to come to grips with reality will be bolstered by Obama's policies that WILL drive up unemployment...
U.S. President Barack Obama may order a hold on a proposal issued in the final days of the Bush administration to expand offshore drilling in previously banned areas, an Interior Department official told Reuters on Wednesday...
But continuing claims (the red line on Calculated Risk's chart) have taken out the 1990 recession.
Get your ducks in a row. Continuing claims are above and initial claims are below the 1990-91 recession.
"Continuing claims are above and initial claims are below the 1990-91 recession"...
Got something credible to back that statement up?
If so please pass it along...
Chart reading must not be in your sphere of expertise, JUANDOS.
You want solutions? Here they are. It will require political courage, and that's the problem.
Videos:
http://finance.yahoo.com/tech-ticker/article/161718/Crisis-Solved-Give-Money-to-Healthy-Banks-Let-FDIC's-Bair-Handle-the-Dying?tickers=C,JPM,BAC,USB,WFC,XLF,SKF
http://finance.yahoo.com/tech-ticker/article/161575/Politics-as-Usual%3A-Change-Comes-to-Washington%2C-But-Not-Bank-Bailouts
So instead of arguing that we're not in bad shape right now - why not offer solutions?...
As suggested in a previous blog post, narrow the requirements for what is offered, and to make sure that what is offered is even possible.
AS I recall, the media pulled the same crap earlier last year, as you noted, when observing that the number of people on welfare hit a "record high", though the numbers were were actually average as a percentage of American citizens.
I actually work in recruitment in the UK and can see this is a global problem for everyone except developing countries who can manufacture and deliver services at a fraction of a cost than in our countries and as getting people to spend will get the economy going again it will also lead to more jobs too, unfortunetly we have priced ourselves out of the market and left ourselves high and dry. I think there is certain area's of hope though, working on increasing green collar job can pull us out of rut and help the earth too. looking at manufacturing green energy from renewable sources or enforcing solar panels on the roofs of houses, government can pay salaries, people benefit, they're already in a heap of debt and that at least would benefit the economy? you'll have to see what the new president will do!
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