Wednesday, October 14, 2015

Nothing Unusual About Labor Market Behavior During and After the Great Recession

Cleveland Federal Reserve economists examined conditions in 11 different recessions and the ensuing recoveries since the late 1940s.

 They used two major indicators of labor market conditions—payroll employment and the unemployment rate—and one for the aggregate economy—real (inflation-adjusted) gross domestic product (GDP).

Their conclusion:
The Great Recession certainly had some unusual features. It is an outlier in terms of the severity of the recession and the sluggishness of the recovery. But the labor market’s behavior has not been that unusual, particularly in the recovery phase. While the recession saw a larger employment loss and a larger unemployment rise than would have been predicted by the decline in GDP, the recovery has seen improvement in these indicators that is completely in line with historical patterns. 

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