http://www.economagic.com/em-cgi/data.exe/cbo/nairu

Now, mind you, these estimates seemed to have been updated by the CBO recently but this has not apperently been announced publicly. It feel to 5.1% in 1998, 5.0% in 1999, 4.9% in 2000 and has been at 4.8% ever since.

The bottom line is this should be considered for all intents and purposes the target unemployment rate or “full” employment rate. If one uses these estimates then note that the 1974-1975 recession resulted in an unemployment rate 3.0% over NAIRU. The 1981-1982 recession resulted in an unemployment rate 4.6% over NAIRU. We are currently 2.4% over NAIRU. According to the incoming administration’s estimates this recession will peak at 4.2% above NAIRU without the stimulus and will peak at 2.9% with the proposal being discussed right now. I think the current estimates are optimistic. My econometric models predict we will peak at 6.4% above NAIRU in the first quarter of 2012 and that even with the stimulus (as it stands) we will peak at 4.6% above NAIRU also in the first quarter of 2012. In short if one believes my model. This will be the worst recession even with the current stimulus proposal passed.

that would have been a better party to attend in the spring of 08.

I apologize I stole your idea it looks like, didn’t read the comments b4 I posted.

Probably a combination of all of them is my best guess but that’s all it is, a guess. I think number 3 has more to do with it but is hard to measure. Hasn’t the average work week also dropped over the last several months. Or for example, I know at a Du Pont plant in Jersey close to where I live has cut all overtime for employees, for the employees in that plant, overtime is where they are actually making some money. So, they didn’t become unemployed, just took a pay cut.

Is the “nature” of the workforce different now? My belief is that, with the demise of the unions and the creation of so many part-time jobs, the American workforce is more flexible. Is that why we’re seeing a such a quick uptick in unemployment the last several months? I think it’s much easier today for employers to Whack Now, Ask Questions later, as opposed to 70’s-80’s. It’s sort of silver lining of sorts. It may mean that we’re seeing the “brunt” of layoff sooner and faster than during any other depression.

In terms of #5, doing some back of the envelope technicals on this chart (if I had the precise data on this chart I could give a more precise answer), the Unemployment rate is definitely going to 8% (I know that seems obvious now). If we break 8%, then it opens the door to 10-10.25% FWIW.

- AT

this is but one cog in the whole unemployment figure being registered these days.
sb

About the only way one could reasonably expect the current unemployment levels to represent the peak for this cycle is if:

a) we are at the exact end of the current recession, AND

b) for this cycle, unemployment peaks at the end of the recession instead of months later.

That much seems obvious from the chart.

The machine to transform the unemployed into inactive has been running better than ever lately.

that’s an interesting new phenomenon, though many of the ‘prices paid’, at those soirees, are really Low..

someone has to cover all those MLM fees– it’s the Seller..