20 November 2009

Today's Great Recession vs. the Great Depression

http://www.nytimes.com/2009/11/07/business/economy/07econ.html

I found an article on today’s United States recession which relates to the 1930’s Great Depression. Though looking as statistics comparing both, the current recession isn’t as bad as the 1930’s but if things don’t change we may see similar numbers very soon.
As we learned in history, the Great Depression started in 1929. At this time unemployment rates were low, 3.2%, but quickly shot to 24.9% in 1933 just four years later. The numbers of unemployed workers eventually lowered as the Great Depression ended and things went back to normal, but this is the highest overall rate of American unemployment that’s been recorded.
The unemployed numbers today have been recorded by months. In September, the rate of jobless Americans was 9.8% and jumped to 10.2% in October. The most current number is 17.5% unemployed. This percent includes the officially unemployed who have looked for work in the past four weeks, the discouraged workers who have been looking for a job in the past year, and part-time workers who want or need a fulltime job.
The New York Times notes that Carmen Reinhart and Kenneth Rogoff’s book said this recession should continue through the end of 2011, two more years. These economists compared today’s crisis to typical crises in the past to get this statistic.
Today the federal government is responding aggressively and hopefully successfully. Reports have shown slight progression of monthly job losses slowing down. This could be a result of a number of new actions like cutting interest rates, a new bill to extend unemployment benefits and a tax credit for home buyers, fiscal stimulus, and different steps by the Federal Reserve and Treasury Department. During the Great Depression, President Roosevelt’s New Deal helped with unemployment rates between 1933 and 1937. Full employment did not return until the 1940s.
The rates of unemployment that Americans are seeing today are the highest level since the Great Depression in the 1930s.

No comments: