For a client project I’ve been analyzing US unemployment data in detail, trying to understand the overall structure and composition of those lacking work. An interesting thing that’s emerged has been the change in the relationship between mean (aka, “average”) and median.
The chart above presents both the mean term term of unemployment (UEMPMEAN, black line) compared to the median (UEMPMED, blue line), monthly, from 1992 to 2012. From 1992 to 2010 the difference between the two series was roughly 8.5 weeks, but as we’ve emerged from The Great Recession we’ve seen that difference surge to 18.7 weeks, or roughly doubling. Three years after the end of The Great Recession, this clearly supports the argument that much of the current US unemployment problem is structural rather than cyclical. Further, its pretty clear that the gap is widening, not shrinking; in other words, there remains a segment of Americans who simply can not find work. I’m sure in this election year, we’ll be hearing more about this, and sooner rather than later. Oh yeh, some folks believe The Great Recession never really ended, which is a view I’m sure the unemployed share.
Personally, I’ve taken the view the United States is very close to entering recession, if not already in a recession. Time will tell.