As Stephen Colbert might ask. Was this a very bad recession or the worst recession ?
Here we compare Recessions versus Depressions going back to the 1920s.
How bad was the unemployment and how much did the economy shrink in each economic downturn ?
This is to clarify the terminology, classifications and history of economic recessions and depression in the USA.
Several Latin American countries had severe downturns in the 1980s: by the Kehoe and Prescott definition of a great depression as at least one year with output 20% below trend, Argentina, Brazil, Chile, and Mexico experienced great depressions in the 1980s, and Argentina experienced another in 1998–2002.
This definition also includes the economic performance of New Zealand from 1974–1992 and Switzerland from 1973 to the present, although this designation for Switzerland has been controversial.
Over the period 1980–2000, Sub-Saharan Africa broadly suffered a fall in absolute income levels
Great Depression (1929-1933) Peak unemployment 24.9%, GDP decline -26.7
Recession of 1937, peak unemployment 19.0%, GDP decline 18.2%
I believe all of those figures are U3 unemployment.
10.1% (U3 unemployment October 2009)
17.4% (U6 unemployment – includes discouraged and underemployed October 2009)
Other US Recessions had unemployment up to 10.8%. and GDP contraction mostly in the -.03% to -5 % range but one in 1945 had -12.5% GDP contraction.
The higher figure you quote in the 15-17% range is the U6 unemployment.
The Bureau of Labor Statistics also calculates six alternate measures of unemployment, U1 through U6, that measure different aspects of unemployment:
U1: Percentage of labor force unemployed 15 weeks or longer.
U2: Percentage of labor force who lost jobs or completed temporary work.
U3: Official unemployment rate per the ILO definition occurs when people are without jobs and they have actively looked for work within the past four weeks.
U4: U3 + “discouraged workers”, or those who have stopped looking for work because current economic conditions make them believe that no work is available for them.
U5: U4 + other “marginally attached workers”, or “loosely attached workers”, or those who “would like” and are able to work, but have not looked for work recently.
U6: U5 + Part time workers who want to work full time, but cannot due to economic reasons (underemployment).
If 1937 was not a depression then neither is what is happening now.
The U4 unemployment numbers look a little worse than the early 80s.
What is happening now in terms of GDP contraction- top to trough
Not worse than 1937, not worse than 1945
Not worse than
Unemployment approximates a bad recent recession in the eighties.
It is definitely a bad recession.
There has been some improvement in employment. Surveying people that I know they are able to find work in their field of employment. Salaries are not overly depressed but are below the peak levels. Salaries in many parts of the tech sector are at high levels.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
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