On Tue, Mar 02, 2004 at 04:11:05PM -0600, Dan Minette wrote:
>
> From: "Erik Reuter" <[EMAIL PROTECTED]>
>
> > Clearly, the 90's were unusual.
>
> In some ways, but not in employment.
Definitely in employment, looking at the late 90's, which is what
I meant to imply (sorry for the ambiguity). Just look at average
historical unemployment:
average
unemployment
rate
years %
==================
2001-2004 5.3
1997-2000 4.5
1993-1996 6.3
1989-1992 6.1
1985-1988 6.6
1981-1984 8.6
1977-1980 6.5
1973-1976 6.5
1969-1972 4.7
1965-1968 4.1
1961-1964 5.9
The last time there was a significant period with unemployment below the
"natural" rate of 5%, it was the late 60's/early 70's, which was a big
boom time. Which was followed by a big bust, with over a million jobs
lost and a period of lower employment. As far as employment, this looks
just like a typical cycle. Just look at the BLS data, get a historical
graph (new feature of their website), and you can see the employment
cycle doesn't look extraordinary. In fact, if anything, looking at
decades back to 1930, it seems the cycle amplitude is attenuating a bit.
> 2002 and 2003 were the first consecutive years with a net loss of jobs
> in each year since the end of WWII.
And the late 90's had the biggest corporate investing boom (and stock
price boom) since WWII. After a big, unsustainable boom comes a cyclical
bust. You haven't shown any evidence that this cycle is significantly
different than others. At every cyclical slow down, a lot of people
shout that it is different this time, particularly those who have
recently left jobs. But they are usually wrong. Yes, this time is
different in several ways (I think the biggest difference is how
much higher private and public debt is, and the huge current account
deficit), but I don't see anything unusual in the employment behavior in
the current recession, which by the way, I think is relatively mild --
there may be worse to come since the excesses haven't been worked off
yet.
--
Erik Reuter http://www.erikreuter.net/
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