Archive for December, 2009

Putting Unemployment in Perspective: 1929 to 2009

December 4, 2009

Most of the graphs you see showing the U.S. unemployment rate are short term trends.  A few of them go back as far as 1948, but I wanted to go back to the Great Depression and put these trends in perspective.

Below is a graph of the unemployment rate from 1929 to 2009.  I estimated the end point of 2009 to be 10%.  The most current Bureau of Labor Statistics report shows a drop from 10.2% to 10.0% from October, 2009 to November, 2009.  But it is a bit dicey whether it will finally end up less or increase yet again.

A note of caution:  Methods of computing the unemployment rate have changed over time.  But in my view, the adjustments in methods do not distort the magnitude of the Great Depression.

So, here is the long view.

Just to put this in terms of how real people were affected by this upheaval, here are some pictures of what it looked like then.  The one below is a bread line. The pictures are from the Library of Congress.

And here is a famous picture by Dorothea Lange of migrant farm workers.  The woman on the right is the one from the famous picture of a mother and child.  She cropped it from this picture and enlarged it.