Six years of pain

Six years ago this month, the US economy officially peaked. We didn’t know it till a year later when NBER made the call, but the labor market has never been the same. The unemployment rate crept upward through the summer of 2008, before exploding that fall and reaching double digits the next fall (up from 4.5% in the first half of 2007), several months after the recession officially ended in June 2009. People call that devastating eighteen months the Great Recession, but I prefer to call this whole six years (and counting) the Little Depression because the economy — and the labor market in particular — remains so depressed.

Consider the change from December 2007 to now (or rather to November 2013, the most recent month we have data for):

The adult (age 16+ population) grew by 13,411,000.

Employment shrunk by 1,887,000.

Unemployment rose by 3,262,000.

“Not in labor force” (neither employed nor actively looking for a job) rose by 12,035,000.*

(*And no, most of that does not come from old people retiring. The drop in the employment/population ratio is 4.1 percentage points if you include all of the adult population, and 3.8 percentage points if you include only those in the 25-54 age range.)

Sometimes the numbers really do speak for themselves.

Tags: employment/population ratio, great recession, little depression, not in labor force, richard buckner, six years, unemployment