Job Data Passes Threshold Where Recessions Dwell [View All]

Job Data Passes Threshold Where Recessions Dwell
By FLOYD NORRIS
When the number of Americans out of work starts to rise sharply, a recession occurs.

By that token, the latest figure for unemployed workers is, at the least, a danger sign.

The Labor Department reported that in December some 7,655,000 people were unemployed, meaning they were both without a job and looking for one. That figure was 13.2 percent higher than the 6,760,000 figure in the previous December. In the past, a 13 percent annual rise has been the sign of a recession every time.

Before December, there have been nine cycles in the United States since 1950 in which the annual change in unemployment rose to 13 percent or higher.

In eight of those cases, by the time the rise got to 13 percent, the recession had already begun, according to later conclusions by the National Bureau of Economic Research. In the other one, the recession began three months later, as depicted in the accompanying charts, which show the year-over-year change in the number of unemployed workers from one year before the increase hit 13 percent until one year after the recession ended. (In the case of the early 1980s, when there were two recessions close together, the chart shows both of them.)

http://www.nytimes.com/2008/01/19/business/19charts.html