February 10, 2009

How does the 12 month increase in unemployment compare to history?

From January 2008 to January 2009 the 12 month increase in unemployment rate was 2.7%. That is a pretty big jump in the unemployment rate for a 12 month period. How does this compare to other previous increases in our history?

You can get historical unemployment data via the database on the Bureau of Labor Statistics website. I pulled the monthly unemployment rate going back to 1948 and then compared 12 month periods.

Below are the higher 12 month increases in unemployment.

July 1981 to July 1982 : from 7.2% to 9.8% =2.6%
May 1975 to May 1975: from 5.1% to 9% = 3.9%
Dec. 1969 to Dec. 1970: from 3.5% to 6.1% = 2.6%
Apr. 1957 to Apr. 1958 : from 3.9% to 7.4% = 3.5%
Aug. 1953 to Aug. 1954 : from 2.7% to 6% = 3.3%
Oct. 1948 to Oct. 1949 : from 3.7% to 7.9% = 4.2%

You can see that there are 4 other 12 month periods in the past 60 years when we had larger increases in unemployment. However its been over 26 years since we seen unemployment rate increase over 2% in a 12 month period. The last such spike was in 1981-1982.