employment: gauging the crisis and outlook greg ip, u.s. economics editor, the economist prepared...
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Employment: gauging the crisis and outlookGreg Ip, U.S. Economics Editor, The Economist
Prepared for “The Jobs Deficit: The Challenge of Putting America Back to Work” New America Foundation
Oct. 20, 2009
Worst recession by employment
Not the worst by GDP
-4.0
-3.5
-3.0
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1948 1953 1957 1960 1969 1973 1980 1981 1990 2001 2007
GDP
Jobless claims suggest turning point
0
100000
200000
300000
400000
500000
600000
700000
22 Jan2000
20 Jan2001
19 Jan2002
18 Jan2003
17 Jan2004
15 Jan2005
14 Jan2006
13 Jan2007
12 Jan2008
10 Jan2009
Four week moving average
Signs of reviving demand for labor in construction, manufacturing
0
0.5
1
1.5
2
2.5
3
Total Construction Manufacturing
Dec-07
Apr-09
Aug-09
Source: BLS, JP Morgan Chase
Vacancy rate, %
USA now a high unemployment country
0
2
4
6
8
10
12
Canada France Germany Italy Japan UnitedKingdom
UnitedStates
2007
Latest
Unemployment rate, %
Long term unemployment may lead to hysteresis
02468
101214161820
Median duration of unemployment, weeks
Crises leave lasting damage
Source: IMF World Economic Outlook Sept 2009 p 122
A smaller future GDP than we thought
8000
10000
12000
14000
16000
18000
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
$200
5 B
N
2007 projection 2009 projection
Source: CBO 2007 & 2009 Budget & Economic Outlooks
Finance, autos & housing share of total employment
8.0
8.5
9.0
9.5
10.0
10.5
11.0
11.5
Jan
-90
Jan
-92
Jan
-94
Jan
-96
Jan
-98
Jan
-00
Jan
-02
Jan
-04
Jan
-06
Jan
-08
Source: Citigroup, July, 2009
Slower labor force growth
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1950-73 1974-81 1980-90 1991-2001 2002-08 2009-19
% /
year
Source: CBO Budget & Economic Outlook Aug, 2009
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