Monday, 9 February 2009

“Way Down in the Hole” [update 3]

If you're in the 'this-recession-won't-be-so-bad' camp, then have a look at this graph comparing American job losses in the two most recent recessions with job losses so far in this one.

Sobering, huh? That figure down there that the arrow is pointing at? That’s 3.6 million so far.

Does this matter for us down here in NZ? Says TVHE,from whom I stole the pic (after they borrowed it from The Big Picture)

Well the US accounts for 10% of our merchandise trade, and they are a major driver of economic activity in Asia - an area which accounts for another 35% of our exports …

UPDATE 1: Be aware of a few things in this graph, not least the stamp “Office of the Speaker” in the corner. As a Cafe Hayek commenter says, “After all these years, Pelosi's reputation precedes her, and that stamp automatically makes the plot highly suspect.” Nonetheless, says Andrew Sullivan, “Pelosi's graph is not that misleading.”

UPDATE 2: The Calculated Risk Blog has a graph allowing you to compare in percentage terms the pace of unemployment growth in this latest panic to unemployment growth in recessions going all the way back through Carter’s recession of 81/82, to Nixon’s of 74/75, and Eisenhower’s of 60/61.

UPDATE 3: The latest Peter Schiff video backs up that lovely employment graph above [hat tip RW].


  1. Interesting numbers.

    I was rather surprised to read the 2001 job losses were greater than 1990/91...I would have expected the opposite, but yes, rather grim reading which will only get considerably worse as the year goes on.

  2. Cafe Hayek has posted the same chart but says it is very misleading - they're running a quiz on why.

    I assume the answer is not "because it came from Nancy Pelosi's office" although that surely deserves half marks at least. My guess is that when measuring a recession's severity it is job losses as a proportion of the work force that matters, not absolute losses.

  3. Ahhhhh...yes, good point, Matt.

    Certainly as I remember it 1991 was much worse than 2001 in general terms.

  4. yup. This uses a highly suspect start point - deliberately picks high point, Total # employed as percentage of the the workforce is probably the key.

    Not to say that there isnt a lot of people being tipped out of work at the moment, just that Pelosi has a stimulus package to sell, and will manipulate any figure to sell it.

    Has Sullivan stopped salivating over Obaman yet? very surprised you would quote him as any sort of authority.

  5. In NZ what will happen is that a lot more people will be "ill". That is, more people will end up on the "sickness benefit". Unemployment will not go up too much as a result and the economy will be saved!



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