Nice interactive graphic from WSJ: Scroll over any month, and it shows the National unemployment rate in percentage terms — since 1948.
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click for interactive graphic
Updated: 07/02/2009
Consumer Credit outstanding fell $14.8b in Sept seasonally adjusted, almost $5b more than expected and marks the 11th month in the past 12 of declines. At $2.456T outstanding, it is 4.9% below the record high in July '08. After a flat reading in Aug, (didn't fall b/c of the CARS program), non revolving debt outstanding fell by $4.9B. Revolving (mostly credit cards) balances outstanding fell by $9.9B. To fully put into perspective today's data, look at the current level of consumer credit (doesn't include mortgages, the biggest chunk of consumer credit) relative to GDP. As of Q3, it totaled 17.2%...
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July 4th, 2009 at 3:41 pm
As the red on the chart indicates, if this is truly the worst economic crisis since the GD then we have a long way to go to surpass the pain of ’81 – ’82.
Homelessness very quickly became highly visible then, and talk of pending depression was widespread among common people. Perhaps I am too far out of the loop now, but it doesn’t seem that we have reached that same level of pain and despair that was evident then.
So either this is not really the worst recession since the GD, or we have only just begun to suffer. But, there is a third possibility too: Ben, Timmy, and Larry are economic geniuses.
July 4th, 2009 at 5:49 pm
Re: the headline on that WSJ article (Rising Job Losses Damp Hopes of Recovery), and others in the last week;
duhHH!, anybody who’s been paying attention to the real data and the bigger picture knew that UE was going to continue to rise and would cause major problems for the recovery. Only people like Brian Wesbury and Kudlow & friends, who apparently have their head up the @sses think we’re going to be bouncing out of this in a V. It really never ceases to amaze.
July 4th, 2009 at 5:54 pm
KJ
The difference is the massive debt bubble that we’re only in the early to mid stages of deleveraging from. And the massive structural problems in our economy that is not creating/providing enough jobs, much less jobs that allow a continuance of our “expected” standard of living. Much more could be written (and it’s all over the web) but it’s only really starting.
July 4th, 2009 at 6:55 pm
>> then we have a long way to go to surpass the pain of ’81 – ’82.
Not sure about that.
Why doesn’t the WSJ put “U-3″ or “U-6″ in the title? Do they use U-3 during 1982 but U-6 numbers now?
>> Homelessness very quickly became highly visible the
Yeah. And, after a while of doing nothing about it and celebrating stock market gains, everybody just stopped paying attention.
That’s one of the reasons I’m not 100% short. I try to remind myself — even though the situation was vastly different than now — about how stock prices rose in the 80’s despite the homelessness. Basically, even if the real economy sucks, prices of some things can rise and rise.
(But, as others have pointed out, we’re in an even worse financial position than when we were back then. So, despite reading that Jim Rogers holds no puts for one of the few times in his life and that Barry is 80% long, I still have some puts…)
July 4th, 2009 at 8:07 pm
Speaking of Barry being 80% long – and he volunteered this a couple days ago – why would one be in that position after such a pronounced bear market rally into the current overbought conditions, and with the market showing every sign of rolling over as we speak? Seems like a long limb to be out on at the moment, big guy – how about connecting the dots for us?
Cocktail hour beckons on the west coast and I’d like to make a toast on the birthday of our great nation: here’s to the brilliant vision of the Framers, and here’s to thanking God they’re not alive to see what we’ve done to it.
July 4th, 2009 at 8:13 pm
@wunsacon & KJ
I neglected to also point out the apples to oranges comparisons since they’ve changed the UE calculation methodologies so much since the the ’80s (as wunsacon alluded to). So if you were to compare apples to apples our UE rate is worse than it was in the early ’80s recession. There are many who have come up with refigured calculations for our present data. One is as Shadow Stats. Another good one is Trader Mark at his web site. Here’s a post from April that explains his methodology for figuring a UE rate that allows that even comparison. I think it’s pretty good:
http://www.fundmymutualfund.com/2009/04/real-march-unemployment-reaches-125.html
July 4th, 2009 at 9:24 pm
Homelessness very quickly became highly visible then
The “visible homelessness” of the early 80s was the result of de-institutionalization of mental patients during the late 70s.People don’t sleep on grates and live in cardboard boxes because they recently lost middle class jobs…..yet!
July 4th, 2009 at 11:23 pm
>> People don’t sleep on grates
It’s gotta be a desperate situation to want to sleep on a grate for warmth. That *smell*…
>> de-institutionalization of mental patients
Hey, waittaminute. After that, they started kicking *all* patients out of the hospitals. (”You think you’re sick? Heck, no! Now, go out there and be healed, ya healthy bast’d!”)
July 5th, 2009 at 12:49 am
wunsacon wrote:
“That’s one of the reasons I’m not 100% short. I try to remind myself — even though the situation was vastly different than now — about how stock prices rose in the 80’s despite the homelessness. Basically, even if the real economy sucks, prices of some things can rise and rise.”
I wasn’t really talking about the stock market. I realize stocks don’t always accurately reflect the economy and can be irrational for long periods of time. However, after the ’82 bottom the market was celebrating falling interest rates, inflation, and “government is the problem” era deregulation. What will the market be celebrating now, falling rates? No. Falling inflation? No. Increasing earnings? Unlikely. Decreasing taxes? No. Less government regulation? No. Declining oil and commodity prices? Not likely. A technology breakthrough that boosts productivity like the PC and the internet? No, that’s already happened.
That’s not to say it won’t move still higher in a continuing flood of Fed induced liquidity, but the fundamentals don’t look good to me. And when the economy really does start to recover, how long will Ben be able to wait before starting to raise rates again? That prospect doesn’t bode well for stocks either.
July 5th, 2009 at 1:20 am
>> I wasn’t really talking about the stock market.
Understood, KJ. I knew I was going off on a tangent…
.. g’nite!
July 5th, 2009 at 1:38 am
During 81-82 I worked in the chemical separation department of a carbon coke plant. As Jed would say weee doggies. It was complete and utter devastation for the chemical industry. Far worse than anything today, anywhere. At least half of cement plants were shut, and swaths of the industry disappeared forever. There were only 11 carbon coke plants left in the whole US, and we were one of the survivors. It had been in continual operation since 1918. Coke was now like gold, and a coke plant in Hilljack Alabama, was ripping the doors off. Our gas storage tank blew up and it didn’t even phase us. And it was across a 4 lane from a gas station! The heat from the giant fireball did sing some people’s hair.
July 5th, 2009 at 7:40 am
Haven’t they changed the way unemployment was calculated 3 or 3 times since 1981? I think it is worst this time, only not apparent yet, because the people and the country are much more willing to spend money they don’t have this time. In 1981 spending a lot of money you didn’t have wasn’t so popular. When this economy is allowed to finally fall, the result will be much worst than anything in my lifetime. It will be at least as bad as the GD.
July 5th, 2009 at 8:09 am
@wunsacon
““That’s one of the reasons I’m not 100% short. I try to remind myself — even though the situation was vastly different than now — about how stock prices rose in the 80’s despite the homelessness. Basically, even if the real economy sucks, prices of some things can rise and rise”
—
As far as stocks are concerned, one should remember that after the lows in 1974, the PE’s were at a pretty low level…
That’s not the case now…PE’s are already higher than the ‘07 all time high…So unless some “E” starts coming out to match (fabricated or not), the market will be forced to bid up stocks to dot.com land if stock prices are to rise…
I’m sure Steve Barry can quantify this argument for me, I’m just going my notions & recollections on a Sunday morning…
July 5th, 2009 at 10:02 am
KJ Foehr Says:
“Timmy, and Larry are economic geniuses”
great punchline
July 5th, 2009 at 11:12 am
in a similar vein people compare the UE today to the GD, neglecting to note that way its calculated has changed a lot
and i was reading some time back that we had a tent city in Sacramento. it wasn’t exactly widely know for some reason
July 6th, 2009 at 11:22 am
One of the first thing Reagan did was saving some money by closing the big mental institutions. The state and local governments were supposed to pick them up and put them in small “group home” institutions (and it would be so much better for everybody). However, nobody gave the local governments any money to build those small institutions, so we just got a bunch of mentally ill people living on the streets now.
July 7th, 2009 at 10:33 am
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