How the World Works

Friday, Sep 4, 2009 08:05 PDT

Just in time for Labor Day: Massive unemployment

The pace of job loss continues to slow, but the overall picture is still grim

As we head into the Labor Day weekend, some thoughts on the labor situation in the U.S., per the unemployment report on August from the Bureau of Labor Statistics.

The unemployment rate rose to 9.7 percent, the highest since 1983. I'm not sure whether "soared" is the right word to describe the tick upwards from July's 9.4 percent, as used by the Wall Street Journal, but 10 percent unemployment, here we come.
The teenage unemployment rate is 25.5 percent, the highest since the BLS started tracking such data in 1948. 10 percent of U.S. men, and 15 percent of U.S. African-Americans, are unemployed.
The so-called U-6 unemployment rate, which attempts to accounts for those workers who have basically given up looking for jobs or settled for part-time work, is up to 16.8 percent.
The economy has shed 7.4 million jobs since the start of the recession.

These are grim numbers, by any standard. Economist Allan Meltzer is upset because he thinks too many comparisons are being made between the present and the Great Depression, but he is willfully missing the point -- this is the worst crisis since the Great Depression, and crawling out of this hole will take a long, long time. Anyone who thinks that the "green shoots" we have witnessed in various sectors of the economy over the past few months is reason enough to pack up the stimulus and call it a day needs their head examined.

The one piece of good news? According to the BLS, the economy shed "only" 216,000 jobs in August. That's the lowest number in a year.

Brad DeLong sums it up: "Not a good number. But not an unexpectedly bad number either..."