Thursday, August 23, 2012

A Disturbing Unemployment Trend

Click to enlarge.

Reaching the blue trend line in the past meant that the wheels were about to fall off. I'm not sure why this was true but it is certainly something worth thinking about. It is also worth mentioning that we are back to the blue trend line. Fantastic.

The 1990 recession? Check.
The 2001 recession? Check.
The 2007 recession? Check.

I am willing to offer a theory. Looking at mean and median data can effectively hide underlying problems within our economy, and yet that is the data most mainstream economists choose to look at. In my opinion, there is some hidden data within this chart screaming to get out.

This post inspired by Mean vs Median unemployment divergence as seen at Dollar Death $piral.

Source Data:
St. Louis Fed: Custom Chart


Stagflationary Mark said...

For those keeping track at home, today's secret sarcasm password is...


Mr Slippery said...

Until the 80s, the mean/median was more stable. When the ratio skews up, the work force is over weighted with long term unemployed.

It's also disturbing that the threshold for recession is trending down.

Thanks for this chart. I need to think about it some more.

Stagflationary Mark said...

Bonus Thought

Why are we on this blue trend line and where are we headed?

Stagflationary Mark said...

Mr Slippery,

It's also disturbing that the threshold for recession is trending down.

You snuck that in just before I posted my bonus thought.

Good times. Sigh.

Scott said...

I think a lot of long-term unemployed are leaving the workforce when their UE benefits run out. When you've been scraping by for two years, a place in a senior center and using the VA for healthcare doesn't seem so bad.

Stagflationary Mark said...


One wonders how many finally settled for a low-paying part-time job too. Sigh.

Fritz_O said...

Ever hear someone in the 65+ range say that young people today are getting lazy and don't want to work?

Before I could agree with that I'd have to know the effect it has on a kid trying to find work when he/she is competing with 30/40/50 somethings for the same work. Kids didn't have to compete with that when I was a kid.

Just a thought...

Stagflationary Mark said...


I think it is a reasonable thought.

My girlfriend is currently competing with young students in a nursing program for work. The job entails calling people and trying to get them to donate blood. She's 40+ and has many years of human resources experience.