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On November 18 of last year I wrote the following:
Above is the remainder of the chart. Again, note the job destruction is nowhere near the 53% level mentioned above.
OK -- so where am I going with this? The best read on total establishment job creation during the latest expansion is 7.2 million jobs. [this figure is wrong; it should be 8.2 million] So far the economy has lost 1,179,000 jobs or 16.66%. So let's assume we see a rate of job destruction on parallel with the worst rate in the last 60 years. That would bring total job destruction to 3.6 million.
Now -- remember that we've already lost 1.2 million jobs. This means we have an addition 2.4 million to go. At a 240,000/month clip that means we've got 10 months of heavy job losses left. That places the end of the news of terrible job losses somewhere next summer. And that assumes we'll see a rate of job destruction on par with the worst rate of the last 60 years.
Let me add on final caveat: there are no guarantees in economics. Remember -- home prices always go up? Yeah, me too. The point is the above analysis could be off for a variety of reasons. All I'm trying to do is get a read of when the recession will be over.
Things have gotten much worse since then. We've lost 4.4 million jobs so far, or 53% of the total number of jobs lost in the previous recession. And the above chart of unemployment indicates we're not done yet.
That's why I (hopefully) add the important caveat to my analysis (like I did above). If I don't, please keep it in the back of your mind at all times: the economy will make an ass out of economists whenever possible.