Does it feel like the recession is over? Here’s a graph to show why you said no

The recession officially ended in June 2009. Broad economic stats confirm that.

And yet…

Does it feel that way to you?

Me neither.

The employment data is making it feel like the economy is still in a lot of distress. Here is a graph that, I think, shows why I’m sensing some distress.

This Isn’t Your Father’s Recession, from CPATrendlines (Update 9-7-12 – link is broken)

Graph is from calculatedriskblog.com. Earlier version is located here. (Update 9-7-12 – this link still works)

The graph tracks the job losses of 11 recessions since World War II. Instead of presenting the data with the starting point of when the recession began, this graph centers all the job loss trends on the bottom point of the job losses. Thus all of them are centered around the low point.

With that graph, this season of job losses is the lowest and probably will be the longest since WWII. The job losses have just barely recovered to what was the worst point in any previous recession. We need to see a lot more recovery before the job losses are only as bad as typical for a post-WWII recession.

Notice the lines all are in a V or U shape? Might be fun to calculate the number of months before and after the low for each recession. Eyeballing the data suggests the recovery time is as long as the time from the start to the bottom. If that is the case, it will be at least another year before the jobs are back to the start of the recession. Consider that a lot of people have graduated from high school and college in that time, which suggests it will be a longer time until we have fully recovered.

On final thought. If you added up the number of work-years included inside the job loss curve of each recession, this current one is quite devastating in terms of lost output, lost employment, and deterioration in worker skills.