Heaven help us if unemployment follow the path of the great recession
|Here's a series of charts showing the duration of unemployment followed by a comparison to what happened in the Great Recession. The chart shows a sharp decline in the number of people unemployed 5 weeks or less. Unfortunately, that was accompanied by a sharp rise in the number of people unemployed for 5-14 weeks. Then the number of people unemployed for 15-14 weeks took a sharp decline. Now, the the number of people unemployed for 15-26 weeks is sharply rising. That red line is very ominous. Let's hone in on what happened during the Great Recession to see why. Once people hit 15 weeks of unemployment they stayed unemployed for 27 weeks or longer. Already we at 6,484,000 unemployed 15-26 weeks vs a max of 3,488,000 in the Great Recession. If the unemployment trends follows the path of the great recession we will easily have over 10 million people unemployed 27 weeks or longer by the time this mess clears up. That is not a prediction, it is an observation based on current data. I do have one prediction and it is not a pretty one. The number of people unemployed 15-26 weeks is nearly guaranteed to rise in the next jobs report and perhaps the next several jobs reports. Continued claims shows why. The BLS reference week for the latest jobs report was July 12-18 at 16,951,000 collecting unemployment. That was nearly month ago. Continued claims have proven to be stubborn. Another 4 weeks will pass between jobs reports. So potentially millions more will will roll into the 15-26 week category from the 5-14 week category, now in a steep decline. If the number of people rolling into the 15-26 category is 1,500,000 or greater, which seems likely, the next jobs report will show 8 million or so people unemployed 15-26 week. Then in two months, those unemployed 27 weeks or more will start ticking up rapidly. Heaven help us if unemployment 27 weeks or longer continues for a year after the recession ends. But that is what happened in the Great Recession. Yesterday, I noted Yet Another fed president supports more free money and a covid lockdown Three Fed presidents have now called for more free money from Congress. Two of them support hard lockdowns of at least 4 weeks. If that remotely sounds like panic, it's because it is panic. The Fed is not in control. It is only an illusion that they ever were. Gold has responded and rightfully so. For discussion, please consider Gold soars to new high above $2000 while managed money sat it out What about the US Dollar? I am, glad you asked.Lost jobs stay lost
Percent of people unemployed by duration
Of those unemployed
Number unemployed by group
Number of people unemployed by duration 2000-2020
Unemployed by duration during and after the great recession
Great recession comparison key points
What If?
Continued claims
Heaven help us
Panic at the Fed
Gold's response to free money
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