Is the economy better or worse than it was in the early 70s? How about early 80s? What about Unemployment?
I suspect that most people think both the Recession and Unemployment are worse now than it was during either of those prior periods.
If that is the case, than what are we to make of the following chart below? It shows Unemployment peaking (after) the ’74 recession at ~9%, and unemployment peaking (after) the ’82 recession at 11%. Here we are 12 months into this recession, with Unemployment just over 7%.
I can think of several explanations for this anomaly: 1) The data is off; 2) this recession is not as bad as those were; 3) structural changes in the economy mean less layoffs; 4) demographics are impacting people leaving the labor force, helping to keep UR lower; 5) we have a lot further to run in terms of job losses. Perhaps some combination of all 5 of these factors are involved.