Archive for October, 2009

Unemployment Update- October 2009

October 22, 2009

The following graphs update the employment picture I posted in July, 2009 (see earlier post below).

There are two graphs:

The duration of unemployment in median weeks (half the people were jobless  less than 18.1 weeks and half were jobless for more than 18.1 weeks as of the end of September, 2009.)

The mean (average) at the end of September, 2009 was 26.2 weeks.  Nearly always, the mean is greater than the median, especially when the distribution is weighted toward the larger numbers.  Without knowing the actual distribution of numbers, it is fairly safe to say that with such a large difference between the mean and median, the median is a fairly conservative number.

The unemployment rate is also a fairly conservative number, since “discouraged workers” don’t show up in this statistic.  The Bureau of Labor Statistics has a series of alternative measures of unemployment, which include part-time workers, those who left the labor force entirely after long periods of unemployment, or who ran out of unemployment insurance benefits.  It is also possible to get data on those who were out of work, couldn’t get a job, turned 62 years of age, and simply retired on Social Security.

So, given those caveats, here are the two graphs.  Each series runs from July, 1967 to September, 2009.

First, the unemployment rate trend, which was 9.8% at the end of September, 2009.

Unemployment Rate Jul1967 to Sep2009

And then the median duration of unemployment in weeks, which was 18.1 weeks at the end of September, 2009.

Median Weeks of Unemployment Jul1967 to Sep 2009

Since last June, the picture hasn’t changed very much, except that the numbers continued to rise.  Look back at the July post and you can see how the upward trend has continued, with no noticeable slowing of the curve.

Looking at the duration of unemployment in terms of the length of a year, it looks like this:

  • Median duration of unemployment (18.1 weeks) is 34.8% of a year
  • Mean duration of unemployment (26.2 weeks) is 50.4% of a year.

So, we are fairly safe in assuming that a large proportion of the workforce is unemployed between a third of a year and half a year.  The magnitude of these job losses will be covered in the next post.
Source:   Bureau of Labor Statistics