Friday, April 03, 2009

Almost the worst since 

The new unemployment figures included a downward revision in January figures. With that revision, we've now reached a point (see the Minneapolis Fed's information on recessions in perspective) where the current decline exceeds the decline of the 1981-82 recession. You would have to go back to the 1948 recession to find a percentage decline as large as this one; that recession bottoms out right about there, so next month I suspect we'll really be able to say this is the worst since the Great Depression, at least in terms of employment. In terms of output, not nearly so yet; productivity has gained enough to keep us away from the worst of those (again, use the MinnFed's page to see that.)

Most readers will want to lay this at the feet of the financial crisis, but Jim Hamilton has another potential explanation: Oil prices. I'm intrigued by that, but I don't see how a supply shock explains inflation behavior over the last year. I'll have to read his paper to see if there's an answer to that.

Meanwhile Mark Perry notes the flip from earlier recessions in terms of gender: Male unemployment is 2% above female. I suspect that is due to the sectors in which employment is weakest -- manufacturing and construction lost 43% of total job loss while representing under 20% of the work force. I don't have data on share of construction and manufacturing employment that is male (I'm sure friends at BLS could find it for me) but I'd be shocked if it wasn't heavily male.