The Morning Report
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The National Bureau of Economic Research, the official arbiters of whether or not the United States is in a recession, finally called it yesterday. That’s not terribly newsworthy considering that everyone knew we were in a recession already.
What’s interesting is that they designated the official recession start date as December 2007, a full year ago. This means that (assuming that the recession didn’t end months ago, which seems pretty safe) this is the longest recession since the 16-month long downturn beginning in July 1981.
Now that we have a start date, we can compare unemployment trends during the current recession to those of recessions past. The graph to the right indicates how the San Diego unemployment rate fared during and after each of the last three recessions (that’s as far back as the unemployment data goes). The horizontal axis denotes the number of months after each recession began, starting of course with month zero, and the three colored lines indicate each recession’s unemployment rate over that period.
This current downturn looks a lot more like that of the early 1990s than the relatively breezy 2001 affair that followed the dot-com crash.
According to the NBER, each of the prior two national recessions lasted just 8 months, although San Diego in specific was hit much harder in the 1990s than in the early 2000s.
Employment, or lack thereof, tends to lag economic activity. The accompanying table shows that unemployment worsened long after each of the prior recessions— even the recent and relatively mild one — had ended.
Considering the severity and length of the current recession, San Diego unemployment could continue to rise for quite some time.
— RICH TOSCANO