U.S. Unemployment Rate Jumps to 8.1 Percent

Graph generated at the U.S. Bureaof Labor Statistics website:

You can't quite see the top of the line on the right -- it's above the 7.5 mark. Since the Great Depression, there've only been two periods in U.S. history when unemployment was this high:

1. All 12 months of 1975 (peaked at 9.0 in May)
2. Nov 1981 through Dec. 1983 (peaked at 10.8 in Nov-Dec 1982)

An interesting comparison the Dow Jones Industrial Average (from Google) for Jan 1981 - and Jan 1983 versus this year: [1] [2]

So if 2008-2009 is like 1981, then we can assume the rest of this year will suck mightily, unemployment will climb to record levels, and there will be lots of unhappy people.

one important diferrence is that the DJIA has lost almost 50% of its value over the last 10 months. By contrast, the largest loss occurring in this period in the late 1970s and early 1980s was about 15% between Feb and Apr of 1980.

In my mind, the big question boils down to: Are we in for 1970s-early-1980s stagflation, or the Great Depression II?

When comparing these charts, they seem different. These seem like different patterns. And of course, there are many other factors: crisis throughout the world financial sector, loss of manufacturing jobs, etc.

So at the moment, i'm think we're in for something worse than the 1970s and 1980s.]]>

U.S. Downturn Dragging World Into Recession "The world is falling into the first global recession since World War II as the crisis that started in the United States engulfs once-booming developing nations, confronting them with massive financial shortfalls that could turn back the clock on poverty reduction by years, the World Bank warned yesterday."]]>