Last Friday, the Bureau of Labor Statistics released theirs Employment Report for August 2020. The big surprise was that the unemployment rate fell to 8.4%, a full percentage point lower than what many analysts had predicted earlier in the week. Although it’s hard to look at this as great news when millions of Americans are still working, the number of unemployed is currently much lower than most experts predicted it would be just a few months ago.
Not Like The Great Depression or Even the Great Recession
Jason Furman, Professor of Practice at Harvard explained:
“An unemployment rate of 8.4% is much lower than most anyone would have thought a few months ago. It’s still a bad recession, but not a historically unprecedented event or one we need to go back to the Great Depression for comparison.”
While the Great Depression, the unemployment rate was more than 20% by four consecutive years (1932 – 1935). This April the rate jumped to 14.7%, but since that month has fallen since then.
During and after the Great Recession (2007-2009), unemployment was at 9% or more by thirty consecutive months (April 2009 – October 2011). Most economists believe that the current exchange rate will continue to fall monthly as the economy regains its strength.
What’s Happening Ahead?
The result will be determined by how quickly we can contain the virus. In their last Economic Forecast Survey, la Wall Street Journal reported that the economists surveyed believe that the annual unemployment rates will be 6.6% in 2021 and 5.5% in 2022. Although that will still be greater than the 3.5% we saw earlier this year, it is lower than the annual rate. reported in 2011 (8.5%), 2012 (7.9%), and 2013 (6.7%).
Still millions of Americans are fighting for this economic downturn. There is however a light at the end of the tunnel. The unemployment situation has not become as bad as many have predicted, and the recovery is happening faster than most thoughts would happen.
Content previously posted in Keep Current Things