Why hasn't unemployment recovered yet?

To answer that question, let’s compare the Great Recession to the others in the last 50 years.

The recession of 1960-61 lasted ten months (April 1960 - Feb 61). The GDP went down 1.6%. Unemployment went up from 5% to 7%, and didn’t drop back down close to where it started until July 62, 17 months after the recession had ended.

The recession of 1969-1970 lasted 11 months (Dec 69 - Nov 70). GDP went down by a scant 0.6%. Unemployment went up from 3.5% to 6.1%, and NEVER dropped back down to where it started. The closest it came was 4.6% in October 73, three years after the recession had ended.

The recession of 1973-75 lasted 16 months (Nov 73 - Mar 75). The GDP declined by 3.2%. Unemployment went up from 4.8% to 9%, and never dropped back down to where it started. The closest it came was 5.6% in May 79, four years after the recession officially ended.

The recession of 1980 lasted 6 months (Jan 80 - July 80). The GDP dropped by 2.2%. Unemployment went up from 6.3% to 7.8%, but didn’t drop back down to where it started until August 87, seven years after the recession officially ended.

The early 1980’s recession lasted 16 months (July 81 - November 82). The GDP dropped 2.7%. Unemployment went up from 7.2% to 10.8%, and didn’t drop back down to where it started until July 84, two years and four months after the recession officially ended.

The early 1990’s recession lasted 8 months (July 90 - March 91). The GDP dropped a meager 0.3%. Unemployment rose from 5.7% to 6.8%. But it kept on rising even after the recession officially ended, peaking at 7.8% in June 92. It didn’t drop back down to where it started until October 94, three and a half years after the recession officially ended.

The early 2000’s recession lasted 8 months (March 2001 - November 01). The GDP dropped 0.3%. Unemployment rose from 4.0% to 5.5%. But, like the preceding recession, it kept on rising after the recession was officially over, peaking at 6.3% in June 03. It didn’t drop back down close to where it started until December 06, more than five years after the recession officially ended.

The Great Recession lasted eighteen months (December 07 - June 09). The GDP dropped 4.1%. Unemployment rose from 5% to 9.5%, but, like the preceding two recessions, it kept on rising, peaking out at 10.1% in October 09. So far, it’s dropped back down to 8.8%.

So, the Great Recession:

• Lasted longer than any in the last 50 years.
• Saw a much steeper decline in the GDP any in the last 50 years.
• Saw unemployment grow more any in the last 50 years.

So if anyone expected unemployment to have completely recovered by now, dream on. Unemployment always trails in a recovery. Always.

http://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States

http://www.miseryindex.us/urbymonth.asp?StartYear=1959-01&EndYear=2011-03&submit1=Create+Report