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Tuesday, January 27, 2009

Recoveries are different now.


The graph at the top is a measure of unemployment that includes "discouraged workers" and also adjusts for part-time employment. We are not at the levels of misery experienced during the early 1980s, but we are gaining on it.
Look at the bottom graph. This shows the length of time it takes for employment to recover to pre-recession levels after the economy is disturbed. There it is for all to see. The last two recoveries we have had are unlike those of the post-WWII 20th century experience. Recoveries are now longer and more drawn out. So, let us hope the economy hits bottom soon. But even when we do...don't look for recovery to be swift and vigorous.

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