Tuesday, January 19, 2010

Recovery-less Recovery: Unemployment Duration Exploding

Nothing says recovery less than a steadily increasing pool of unemployed workers facing the specter of a quickly increasing average (and median) length stint on unemployment.

In fact, as has been widely reported, the median and average stay on unemployment has simply exploded far surpassing the highest levels seen since records have been regularly kept.

Looking at the charts below (click for super interactive versions) you can see that today’s sorry situation far exceeds even the conditions seen during the double-dip recessionary period of the early 1980s, long considered by economists to be the worst period of unemployment since the Great Depression.

Currently, there are some 6.13 million civilian workers that have been unemployed for 27 weeks or more with the average stay on unemployment standing at a whopping 29.1 weeks and the median stay reaching 20.5 weeks.

Further, as you can see from past cycles, all three of these measures will likely eventually reach their peaks well after the official end of our current economic contraction.

In fact, the most recent two completed cycles (90s S&L crisis and dot-com bust contractions) saw duration of unemployment continue to grow for some two to four years after the technical end of their respective recessions… a solemn notion indeed.

One might consider, with such stark examples of epic structural unemployment, whether the future negative feedback functions associated to this brutal a bout of joblessness are currently being underestimated.