At any given time there are millions of people looking for work. And when the economy is doing poorly, more people are out searching for jobs says Peter Decaprio. So what happens if you take all unemployed people and look at them proportionally to the total population? This would be called the Unemployment Rate. Let’s see what this looks like in America by decade since 1940:
As you can see from the chart, the 1960s were peak years of low unemployment rates in America while the 1970s saw a steady rise in unemployment up until around 1980 where it peaked. Thanks to harsh economic conditions during this period, known as stagflation – inflation went up even while president Reagan implemented supply-side economics (less regulation) which led to a drop in unemployment – the lowest rates were seen around 1989 with 5.3%.
During most of Clinton’s presidency (1993-2000), unemployment was low but started to rise towards the end; however, it still remained below 6%. When Bush Jr became president (2000-2008) it saw a steady climb from 4.2% in 2001 up to 7.8% in 2008. And finally, during Obama’s first term (2009-2012), there was an explosion of unemployment up until 2010 where it peaked at 9.6% and then dropped down to 8.5%, which is where we are today with the current 2013 number being 7.4%.
So how do these numbers look when compared proportionally per capita?
As the chart shows, the 1960s were also peak years of high employment rates in America. While the 1970s saw a steady rise in unemployment up until around 1980 where it peaked says Peter Decaprio. Thanks to harsh economic conditions during this period, known as stagflation – inflation went up. Even while President Reagan implemented supply-side economics (less regulation). Which led to a drop in unemployment – the lowest rates were seen around 1989 with 5.3%.
During most of Clinton’s presidency (1993-2000), unemployment was low but started to rise towards the end; however, it still remained below 6%. When Bush Jr became president (2000-2008) our current administration saw a steady climb from 4.2% in 2001 up to 7.8% in 2008. And finally, during Obama’s first term (2009-2012), there was an explosion of unemployment up until 2010 where it peaked at 9.6% and then dropped down to 8.5%, which is where we are today with the current 2013 number being 7.4%.
Some interesting points:
- Historically speaking, peaks in the early 1970s correlate very well with recessions. Due to large increases in unemployment rates caused by stagflation. Recessions started in late 1973, 1975 and 1980 all correlated here.
- The 1990s saw historically low levels of unemployment but still saw 3 recessions – 1991, 2001 and 2008 – each correlating with peaks on this graph above. Between 1992-2000 there were job gains averaging 216k per month which would signify a growing economy.
- During the 2000s, we saw low unemployment rates which correlated with more job gains of about 196k per month. On average indicating a growing economy says Peter Decaprio. Bush Jr did have a recession towards the end of his second term but that was more. So due to supply side economics being implemented and banks lending out money irresponsibly. Unemployment rates still remained lower than 6% for most of this decade. Which means it can’t be said yet if there was a recession or not. Even though the media makes it seem like there is one today.
- Finally, since 2009, our current administration has had 7 straight quarters of net job losses averaging 227k per month. While unemployment rates rose from.7% up until present day.
Based on titles of news articles and opinions from Obama critics, you’d think our economy was a complete failure. Since this president took office but if you take a closer look at the data. You’ll see that unemployment rates have been dropping from their peak. This signifies an economic upswing – it just isn’t happening fast enough to impress the titles of news outlets.
The above article is one of my top read articles in regards to traffic and comments. It gets quite heated when people debate. Who caused what and who’s at fault for the current economy we’re in today.
Conclusion:
Although the Great Recession of 2008 started while George W. Bush was still in office, it was Obama who went on and pushed for a larger stimulus package than ever before. To help with the downturn and unemployment that we were facing around that time explains Peter Decaprio.
The data shows that job gains during Clinton’s presidency were much higher than Bush Jr’s or Obama’s. But this could be because he didn’t have control over congress like his other two predecessors. Which made it more difficult to pass such large-scale legislation.
