Snapshot for July 30, 2003.
Not all recessions are equal
According to a July 17, 2003 statement by the National Bureau of Economic Research—the official arbiter of recession dates—the recent recession ended in November 2001. However, for many people it still feels like a recession is in progress because unemployment continues to rise.
The most recent recession has seemed to last longer because the official recession dates and the troubles in the labor market do not coincide as they have in the past. Prior to the 1990s, a recession’s official start was marked by a rising unemployment rate and falling employment levels. Conversely, a recession’s end was followed closely by a recovery in the labor market.
The term “jobless recovery” was coined to mark the fact that the economy can grow while unemployment continues to rise. In the recession of the early 1990s, the end of the official recession preceded the recovery of the labor market—marked by falling unemployment rates—by 18 months (see figure). In the case of the latest recession, employment declined and unemployment increased for another 19 months after the recession officially ended, and both indicators continue to show signs of worsening.
Unemployment rose during the jobless recovery period after both the most recent recession and the recession in the 1990s. However, the current jobless recovery period is distinguished by the fact that not only is unemployment on the rise, but employment has been on the decline for the 19 months following the end of the recession. This is in contrast to the jobless recovery period of the 1990s, when employment increased even as unemployment continued to rise.
Although 1.6 million jobs were lost during the official “recession,” 938,000 have been lost since it allegedly ended. No wonder few are relieved at last week’s announcement that the recession officially ended more than 19 months ago.
Source: Bureau of Labor Statistics, Current Population Survey.
Note: Official recession dates are taken from the National Bureau of Economic Research, http://www.nber.org.
This week’s snapshot was written by Christian E. Weller.
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