Last week, I ran the unemployment numbers over the next few years assuming that 200,000 jobs are created a month and 150,000 new workers join the workforce each month.
Today, I will run the unemployment numbers for the next few years assuming that this recovery looks like the one that followed the 2001 recession. After each recession, it seems that it takes longer and longer to get sustained job creation. After the 1990-1991 recession, it took about a year. After the 2001 recession, it took about three years.
Prior to 1991, it usually took only four to six months after a recession ended to get sustained job creation and before the 1981-1982 recession, it happened immediately.
In 2003, the unemployment rate peaked in June at 6.3% and in 2009, it peaked in October at 10.1%. Lets assume this recovery follows the same job creation path that the 2003 one did. Lets do the numbers of what we would expect:
Estimated Actual
January 2010: 9.9%(est.) 9.7%
April 2010: 9.5% 9.9%
August 2010: 9.6%
December 2010:9.4%
March 2011: 9.2%
June 2011: 9.2%
September 2011:9%
January 2012: 9%
March 2012: 8.8%
June 2012: 8.8%
September 2012:8.7%
January 2013: 8.5%
Here are the yearly averages for unemployment for the next three years:
- 9.6%
- 9.1%
- 8.8%
So, by October 2012, if this recovery resembles the 2003 recovery, the unemployment rate will have fallen eight tenths of a percentage point to 8.7%.