Comparing Job Losses to Past Recessions

The web is enthusiastic for charts comparing job losses in this recession to those past.

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The Internet has plenty of pickings if you're looking for a chart that compares the job losses of this recession (beginning in December 2007) with the losses of previous recessions.

Speaker of the House Nancy Pelosi's office put out this chart, comparing this recession to the previous two recessions. It's a startling image, but it's a slightly ridiculous comparison, given that no one is comparing this recession to the past two. The President himself calls this downturn "the most profound economic emergency since the Great Depression."

Justin Fox at Time has this chart, comparing this recession with the previous five. It's much more helpful, given that our unemployment rate is still well below the 1982 peak of 10.8 percent.

As Fox says:

"So far the fall in employment is comparable to that in 1974-1975 and 1981-1982. If the comparison holds, the declines should end within the next four or five months. But we of course have no idea whether the comparison will hold."

Nate Silver at FiveThirtyEight.com picks up on Fox's chart and muses that the economy's volatility has lessened as it has expanded in the postwar period, possibly leading to drawn-out employment recoveries following recessions (or jobless recoveries). Here's a Silver table:

Months Required for Employment Rate to Return to Prior Peak

  • September 1948              20
  • July 1953                           23
  • August 1957                     20
  • April 1960                          20
  • March 1970                       18
  • July 1974                           19
  • March 1980                       10
  • July 1981                           26
  • June 1990                         31
  • February 2001                  47
  • December 2007               ??

Economist William Polley has a chart with an even broader stretch--11 recessions. He notes that "the current recession (orange) is very similar to the 1981 recession (light green) in terms of job losses as a percentage of peak employment. But we have had sharper downturns in percentage terms." 

Polley says he thinks it will take 18 to 24 months for employment to return to its last peak.

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