Wednesday, April 23, 2008

U.S. Unemployment is Short and Rare

Pundits and the media continue to barrage us with recession claims, but unemployment data still do not support this. The graph above shows U.S. unemployment rates over the past 50 years. Note how the sharply the unemployment rate spikes upward at the onset of recessions.

Where is the spike for 2008? So far, there isn't one. In fact, the unemployment rate for March 2008 is just 5.1%, significantly below the long run (50-year) average of 5.9%.

In addition, unemployment duration in the U.S. continues to be relatively short. The median duration of unemployment as of March 2008 is only 8.1 weeks: so the typical worker is only out of work for about two months! And as the pie chart below shows, unemployment lasts less than fourteen weeks for two-thirds of the unemployed.


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