I have posted on a comparison of the last major recessions. The first such comparison featured the GDP growth as we march through that recovery. Each President; Obama, Bush, Clinton and Reagan had a shot at a recovery.
This post will feature the unemployment rate as we continue from recession to recovery. This specific comparison, or feature, will look at the raw unemployment rate. All data is taken from the BLS.gov website.
So, what does the data show?
First, the data shows that President Obama was given the highest unemployment rate since 1982. Back then, the rate stood at 10.8%. Obama was given a very high 9.5%. Further, this recovery looks like all the recoveries EXCEPT 1982, in that the unemployment rate went up before experiencing it’s decline. This is most assuredly due to the fact that employment is one of the last indicators to recover; it’s no surprise that we see the rate rise just after the official end of the recession.
In fact, this current recovery of 2009 looks much like that of 1991 in that unemployment remained stubborn, even increasing, through the first 17-18 months before beginning to improve. Some have speculated that this is due to the fact that these two recessions were mostly due to financial troubles. In fact, all recessions, again with the exception of 1982, saw a bump or continuation through month 19-20 before settling in on better numbers. However, that is where this recovery breaks with it’s sisters.
Unlike previous recoveries, this one has seen a consecutive rise in the rate for 3 straight months, and we’ll see what the numbers tell us Friday. By this time every other recovery well into stronger employment numbers. If this recovery continues it’s recent rise, it could very well be less than 8 tenths of a percentage point of it’s post recovery high of 10.1%.
This recovery most closely resembles those of 1982 and 1975 in terms of starting unemployment rate with 1982 coming in at 10.8% as I noted earlier. 1975 began at 8.8%. That leaves the 2009 recovery almost exactly in the middle at 9.5%. Where the two earlier recoveries are similar is in their rate at month 22; 7.5 and 7.3% respectively. 2009? Not so good showing a rate of 9.0%, not that much stronger than where it began nearly two years ago. In fact, at the 24 month mark the two older recoveries were at 7.4 and 7.2 respectively. 2009 is showing a dismal 9.2%
The recoveries of late have been different than the recoveries in the late 70’s early 80’s. There recoveries were swift and dramatic. The most recent three have been less so, in some cases taking better 18 months to really show improvement. We’ll see if the recovery of 2009 takes that same path and begins to really improve in unemployment rate or if it’ll continue it’s recent trend of a rise in the rate. Let’s hope for the former.