Unemployment Today vs. the Great Depression

The job market may be in its worst condition in decades, but the Great Depression was still much, much worse.

Two economists with the Federal Reserve Bank of Dallas recently put together a report called “A Historical Look at the Labor Market During Recessions.” It has some great graphs, including this rather scary one:

By December 2008, the authors write, the unemployment rate “had already surpassed the average of all post-World War II recessions — and it continued climbing through 2009.”

That Great Recession jobless trend sounds much less menacing, though, when you compare it with the Great Depression — and indeed, other interwar recessions.

Here’s another chart from the Dallas Fed report:

As you can see, the unemployment increases so far in this recession (purple line) have still been well below the average of those for all the interwar recessions (red line).

The unemployment numbers for the Great Depression and earlier are based on research by Stanley Lebergott and Michael R. Darby. The report offers some ways to put this data in better context, given how much the structure of the economy and the labor force has changed in the last century.

(The following blog can be found at 

http://economix.blogs.nytimes.com/2010/01/28/unemployment-today-vs-the-great-depression/

and was written by Catherine Rampell on January 28th, 2010)