As promised in my last entry where I ran what unemployment numbers would look like in the next two years if this recovery followed the 1976 recovery.
The 1976 recovery was one of the last hurrah's for the old instant snapback recoveries. Before the 1990-1991 recession, economic recoveries happened like an on/off switch, with large numbers of jobs coming back as soon as the recession ended.
The 1974-1975 recession ended in mid 1975 and in late 1975 through mid 1976, economic growth was absolutely incredible, at almost 9% per quarter at a real annual rate. This was most of the reason why Gerald Ford came back to nearly beat Jimmy Carter at the end of the 1976 campaign.
Unemployment peaked in May 1975 at 9% and peaked in October 2009 at 10.1%.
Now lets do the numbers of how unemployment would look if this recovery followed the 1976 recovery.
Estimated Actual
January 2010 9.7% 9.7%
April 2010 9.6% 9.7%
August 2010 9%
January 2011 8.7%
April 2011 8.9%
August 2011 8.8%
January 2012 8.4%
April 2012 8.2%
August 2012 7.9%
January 2013 7.8%
This is quite similar to what the Obama administration is projecting and a tad more optimistic than what the CBO is projecting.
I find this scenario very optimistic considering that it took three quarters with an average of 7% GDP growth to get here when even the CBO is projecting growth of just 1.9% in 2011.