Looking Ahead on Unemployment

In taking in to account the recent statistics on unemployment dating back to the lowest rates of the Bush administration (4.4% in October 2006) and the data since that point, I have come to the conclusion that we will experience depression level unemployment (10% or more) in October 2009. A depression will likely be eminent and will become official (10% or more over two consecutive economic quarters) in March 2010.

By February 2010, one in eight Americans in the workforce will be unemployed and will be attempting to pursue employment, meeting the definition of “unemployment” according to the Bureau of Labor Statistics. By the end of 2010, the rate will reach 18.1%.

Based on data from the Bureau of Labor Statistics and projections using a polynomial trend-line, these calculations were determined with over 98% certainty that the current recession will become a depression once the summer is over with October 2009 unemployment hitting 10.7%. A depression will become official with an unemployment rate of 13% in March 2010.

By comparison, the unemployment rate from May 1979 to August 1983 increased from 5.6% to 9.5% (an increase of 69.6%). Over the ensuing 52 months (September 1983 to December 1987), unemployment dropped from 9.2% to 5.7%, a drop of 38%.

All of these calculations do not take in to account any economic impacts. The only details taken in to account are the monthly unemployment numbers from the Bureau of Labor Statistics.