Friday, June 5, 2009

Can't argue with the data. Job losses are decelerating.

There is no denying it. As the unemployment rate continues to rise,

unemployment rate

the rate of job losses is starting to drop. The data is clear.

non-farm payrols

It's interesting to compare the rate of job losses in the current contraction to the prevous recession with meaningful job losses. Such recession took place in the mid 70s:

The job losses of the current recession are deeper and longer lasting than the recession in the 70s. If we were to repeat the 70s pattern, we should be seeing payrols actially increase in the next couple of quarters. Unlikely. In Paul Krugman's words the economy is "stabilizing not recovering". However given where we were 6 months ago, this is indeed a positive development.

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