The economy may move in cycles, but the timing of those cycles is naturally the subject of intense interest and speculation. That’s particularly true in the most severe recession to hit this country since the Great Depression, with millions of Americans out of work for long stretches of time.
The folks at the Atlanta Federal Reserve recently posted these two charts that together explain pretty clearly exactly where we find ourselves. (The data driving the charts date to January, but nothing in the numbers since then would change much.)
The first charts the number of layoffs and firings over the last decade (areas in gray are recessions.) The spike in the current recession is both higher and more sustained than in the recession at the start of the century, but in recent months it has fallen dramatically to somewhat normal levels.
The second illustration charts the collapse in hiring as the recession hits. It starts to fall off a cliff in early 2008, and it continues to plummet well into 2009 as well. It has stabilized more recently, but at levels well, well below even the worst of the 2001 recession.
“…the story going forward is not going to be about layoffs and discharges — which have been falling steadily since last spring — but instead job creation, which has bottomed out (though remaining well below prerecession levels),” concludes Dave Altig, the Atlanta Fed’s senior vice president and research director.
What we still don’t know, of course, is when — and how steeply — that chart will begin its upward climb. As the black line indicates, we’re in a very deep hole, and climbing out is going to take years. Some analysts are predicting that the slow climb may begin Friday, when the employment report for March is released. But as Reuters reports, there’s very little consensus:
“The median forecast for nonfarm payrolls is for a rise of 190,000 in March after falling 36,000 in February. Forecasts range from a loss of 50,000 to an increase of 400,000, an indication of the uncertainty surrounding the impact of hiring for the 2010 census. The unemployment rate is forecast steady at 9.7 percent. Forecasts range from 9.5 percent to 9.9 percent.”