RUNNING THE NUMBERS. Employment losses continue to be in line with 1981-82 recession.



The key point is this:

It is a fairly busy chart, but we can see the current recession (orange) is very similar to the 1981 recession (light green) in terms of job losses as a percentage of peak employment. But we have had sharper downturns in percentage terms.

If you believe that this recession is not fundamentally different from other demand-driven post-war recessions, then a forecast of job losses continuing for another 6 to 9 months would not be out of line. Furthermore, looking at past cycles, one would expect it will be at least a year (possibly more if the recovery looks more like that after the 2001 recession) before employment reaches the previous peak. Personally, my expectation is that it will take 18 to 24 months (from now) to get back to the previous peak.

There's another chart at the linked site, with additional discussion.

Consider two other things: unemployment tends to be a trailing indicator, and the stock averages a leading indicator. The big bull market that began on August 13, 1982, proved to signal a recovery that began in March of 1983.