The worse part of the financial crisis that started in 2008 was the shocking manner in which unemployment levels skyrocketed. In a very short period of time the unemployment level more than doubled from 4.5% to around 10% at the peak. The latest numbers from the Labor Department show hope, as the unemployment rate continues its slow decline to the current level of 7.9%.
Historically, 8% unemployment is an extreme level that the U.S. has only rarely experienced as seen below in the Chart of the Day. However, the unemployment rate has always been volatile, rising and falling rapidly as the economy respectively enters and comes out of recession.
If we look at the unemployment numbers by age group, we can conclude that “life is not fair”. Younger workers have taken the brunt of the job losses in this recession. As the economy remains at stall speed, fewer new jobs are available to college graduates and other young people looking for their first job. With a slow economy, declining wages and an uncertain future, older workers are doing everything they can to keep their jobs and many people who had thought about retiring are not as the cost of living keeps escalating.
Recently, the U.S. economy has barely been growing at about 2% a year. With unemployment rates still at recession levels, it will take a lot more than 2% growth before everyone who wants a job can get one.
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