Saturday, November 8, 2008

Unemployment from 1950

The dark lines above are officially recognized recessions. The red is John Mauldin's forecast unemployment, but he qualifies his forecast by noting that this recession is different from the ones that preceded it:
This recession is the result of serious bubbles in the housing and credit markets imploding. It is not the result of excess inventory or overinvestment in manufacturing capacity. As I have written numerous times, these excesses took years to build up and will take at least 2.5-3 years to correct. We are 15 months into the correction process. That is unlike any other recession we have experienced. So be careful in your use of comparisons based on historical averages.

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