Projecting "The Jobs Chart"

By now the infamous Minneapolis Fed "change from pre-recession employment" jobs chart (all too often misattributed to other sources) has made popular folkore. Naturally, that's the chart which shows that 36 months after the start of the depression the change from peak employment pre-recession is just in a parallel universe of its own. The chart is presented below:

Yet what few if any have done is to extend and project what this chart may look like in the future. We have on several occasions attempted to predict how the "change from peak employment" chart will appear over the next several years. Below is our most recent attempt at predicting how many more months of recession we have assuming a gradual pick up in the economy (assumptions are presented in the chart). The chart shows that based on conservative economic pick up estimates, the depression starting in December 2007 will have 96 months to run before we reach the precession level in jobs.

And one big caveat: this chart does not assume a growth in the labor force, which is of course wrong, but as the latest BLS data indicate for some inexplicable reason the labor force continues to contract and is back to three decade lows. If we were to account for the roughly ~90,000 theoretical increase in baseline labor force increase per month (which will eventually catch up with the economy, manipulated BLS data notwithstanding), the pre-recession recovery will not occur for an additional 50-60 or so months, a result that is just so ridiculous that charting it would merely incite derisive laughter.



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