Friday, May 08, 2020

Comparing Two Recessions

Job losses during the Great Recession of 2008-2009 were largely permanent job losses. Job losses during the Great Shutdown of 2020 are largely temporary layoffs. The future course of the economy will, of course, depend on the microbiology. But the economy seems well situated for a rapid recovery if testing, treatment, and vaccine development allows it. (Click on image to enlarge.)

An important caveat: The labor force participation rate has experienced a large drop. Perhaps there are many permanent job losers who are classified as not in the labor force because they cannot search during the pandemic.