June 6, 2009

Unemployment is NOT at a record

So I'm reading the news headlines and I come across this one: "U.S. unemployment hits record but job losses slow". Oh, no! I think to myself, this must mean that unemployment jumped above 20%. But then I read the article and it says this:

"However, the Labor Department said the unemployment rate raced to 9.4 percent, the highest since a matching rate in July 1983, from 8.9 percent in April. This reading beat the peak in the jobless rate during the 1973-1975 recession that lasted 16 months."

Well reading the title of the article and that quoted bit makes it sound as if 9.4% is the "record" at least post 1973. They say 9.4 is the highest since 1983 when it matched the rate and it is above the rate in the 73-75 recession.

Of course this isn't a real record though. They should know that unemployment during the Great Depression was over 20%, right? OK maybe their records don't go back that far like how the mortgage foreclosure/delinquency records only go back to 1972. No that doesn't explain it either cause the Bureau of Labor Statistics has unemployment data going back to the 1940's.
Its not too hard to find that the unemployment rate hit 10.8% back in 1982. Our current unemployment rate of 9.4% isn't even a record in the past 30 years. If you reread that bit quoted above, it makes it sound as if they were looking at data at least going back to 1973 so surely they should have spotted the peak in 1983. I find it odd that the article talks about "record unemployment" then talks about our current 9.4% rate matching what we had in July 1983 and exceeding what we saw in 1973 but neglecting to mention that unemployment was 10.8% in 1982.

Let me make it clear:

The current 9.4% unemployment rate is not a record. Unemployment was 10.8% in 1982. Unemployment was well over 20% in the Great Depression.

The current 9.4% rate is not even close to a record by any measure.

Now what I bet the author of the article meant to say is that the total number of unemployed people is at a record. That much is true. The total number of unemployed people is a record right now. But you know what is also true? The total number of people in the labor force hit a record in May as well. The population of the USA also hit a record this past month. In fact the nation has had quite a few months of record setting population totals now. While our population is growing it really doesn't make a lot of sense to report the "news" that labor figures also grow. Sure we have more unemployed people now than in 1982 or in 1973 but there are also many more employed people now than in those previous decades.

For a look at how the current recession stacks up to previous see my previous article on Comparing Unemployment Increases During Recessions

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