Scary Charts...

Calculated Risk puts these charts together each month when the government releases its employment reports.  The first chart (at right) is the scariest one.  It's comparing percentage job losses occurring during each of the post-WWII recessions.  The current recession's job losses are far deeper than any of them, and it appears likely that the deep losses are going to last much longer than any of them.  Not good, not good at all.

The dotted line at the end of the current recession's line shows something interesting – the job situation with the effects of the census-taker jobs removed. For the 2010 census the federal government hired almost 400,000 temporary workers – more than ten times the hiring in any previous census.  (Side note: the administration tried to justify this hiring as a stimulus measure – ludicrous given the temporary nature of the jobs – but almost certainly the real motivation was to distort the census numbers in a way that would favor Democratic-leaning regions.  According to some estimates, nearly 80% of the census-takers worked in districts that voted for Obama.)

The second graph (at left) is nearly as frightening as the first.  The red line shows the unemployment rate since 1960.  The only previous time we had more than a year of above-9% unemployment was in 1982-1983, for a year and a half.  I remember this period well; I was trying to get a little business started and times were very tough indeed.  We're clearly going to go over one year of above-9% unemployment again, and probably then some. 

But to some extent the books have been cooked: these days the official unemployment number is (in my opinion) artificially lowered by removing those people deemed to have stopped looking for work.  This month a half million people were removed from the unemployment number for that reason; without this ”adjustment” the number would have gone up.  I am very suspicious of arbitrary adjustments like this – it's something that cannot be directly measured, is therefore estimated, and is therefore subject to political pressure.  If these adjustments are removed from the current number (as they are for pre-2000 numbers), the current unemployment would be approximately 11.9% – and we would have been over 9% for 19 months right now.

My conclusion is that this recession is far deeper and broader than the government announcements would have us believe.  For political reasons the Obama administration is hiding the truth from us – at least until after the mid-term elections in November...