US Unemployment Rate: 1930s vs. 1980s vs. 2000s

We’ve had quite a bit of discussion about the post concerning unemployment rates now verses in the past.

The following graph is from University of Michigan economics Professor Mark J. Perry.

Perry writes:

We still have a long way to go before the jobless rate equals the levels of the early 1980s. So before we make comparisons to the 1930s and declare that we are in Great Depression II, how about first making comparisons to the 1980s?

This graph is from Prof. Perry.

20090116UnemployementRate

Published Friday, January 16, 2009 7:13 PM by Right-Mind

Comments

# re: US Unemployment Rate: 1930s vs. 1980s vs. 2000s

Very interesting -- there is a lot of controversy surrounding Shadowstats, such as the conversation here:

The following comment is interesting. If it is correct, there are problems both with the official statistics and also with Shadowstats; in either case it is difficult to make meaningful comparisons between now and the 1930s on the basis of the statistics:

"The first thing that stood out to me about Shadow Stats is that William's figures are usually a constant spread from the official government figures. The derivatives of the graph almost never vary. In order to figure out why this is so, I went hunting through his "about" pages to find his methodology. It turns out that this is not an accident; the similarity of the graphs is the result of his methodology.

"It seems that John Williams does not actually recompute CPI etc using the old techniques. What he does is take the current measurements, and then offsets them with a correction factor. This correction factor is derived from some internal government document which was created around the time that the measure is changed (e.g. someone writes a memo claiming that the new CPI will be 2% lower). Hence, his system has the same problems that the new government measurements have, namely that they cannot meaningfully be compared with the original government measurements. They are simply an alternate metric, and one of dubious quality.

"This is a really shame. We desperately need a site that actually does what Shadow Stats claims (but fails) to do. If I hear another mathematically illiterate economist/pundit numerically compare 2000s CPI with 1980s CPI (or 2000s unemployment measurements with 1930s unemployment measurements), my head is going to explode."

Friday, January 16, 2009 9:51 PM by cdwitmer

# re: US Unemployment Rate: 1930s vs. 1980s vs. 2000s

Here is a link to some of the debate over Shadowstats:

www.econbrowser.com/.../shadowstats_deb.html

Friday, January 16, 2009 9:52 PM by cdwitmer