Friday 2:21 p.m. Dec. 4, 2009
There is some very good news on the unemployment front in both the U.S and Canada in reports from the U.S.Bureau of Labour statistics and Stats Canada.In the U.S. the the jobless rate dropped in November to 10.0 % from 10.2 %.Job losses in November totalled only 11,000. This is clearly a very welcome statistic which probably indicates that the unemployment rate has now peaked and in the coming months will start dropping on a month to month basis.Of course, in order for this to happen more of the stimulus funds need to be spent and more employers have to start hiring workers as sales and confidence expands. In all of the previous recessions except for the mini recession in 2001-03 once the labour market turns in a given month at the end of the technical recession month to month employment improves and the unemployment rate drops and does not return to the previous peak.
This was true in 1973-76; 1981-84; 1990-1993. In each of these deep recessions the unemployment rate peaked and then fell consistently month to month in the months to follow. We shall see if this slump follows a similar pattern but there is every good reason except for the degree of globalization that now prevails to except a similar outcome. If you are betting it is a good but somewhat risky bet.
The details are as follows : Unemployment peaked in May 1975 at 9.0% then declined month to month to 7.4 % a year later.In two years it was 7.0%, 6.0% in three years and 5.6 % in four years.
Unemployment peaked in November 1982 at 10.8 %. It then fell to 8.3 % a year later, to 7.2 % two years later and to 7.0 % three years later.
In 1992 it peaked at 7.8% in June then fell to 7.0% a year later, to 6.1 % two years later and to 5.6 % three years later.
In Canada the unemployment rate dropped from 8.6 to 8.5 %.Full time employment rose by 39,000 in November the third consecutive month of employment gains. The labour market however still remains(-1.9%) 321,000 below its its October 2008 peak .
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