Saturday, September 28, 2013

Oh, what a lucky man he was

Marcus Nunes (7 September 2013) quotes Ed Lambert:

Volcker put the breaks on the liquidity coming from the Fed rate in the early 80′s. And the babies born from 1960 on graduated from college into a world of tight liquidity due to tight Fed policy. They became disadvantaged. They did not find job openings. As a generation, they fell behind. I was one of those babies that graduated into the heart of the 1982 recession.

Marcus responds:

Actually it appears he had greater luck than those who graduated a few years earlier! The charts show how lucky Edward was!

The first of Marcus's charts shows the Unemployment Rate for 1979-1989:

Graph #1 from Marcus Nunes.
Oops, I erased most of 1989, there on the right.
How lucky Edward was! If he kept looking for work until 1984 his chances would have been as good as they were in 1980. If he kept looking till 1988 his chances would have been as good as they were in 1979. Lucky guy, Ed!

Here's how unemployment looks at FRED for the 1979-1989 period, same as Marcus:

Graph #2: The Unemployment Rate, 1979-1989
Here's the whole data series, with Marcus's bit of it highlighted red:

Graph #3: The Unemployment Rate, 1948-2013
Edward Lambert went looking for work just when unemployment was at the highest point of the whole 1948-2013 period. Marcus says Edward was a lucky man.

1 comment:

Jazzbumpa said...

Yes - entering the work force at the exact time of greatest unemployment since the GD is a stroke of good fortune we all should envy.

I started in 1968.

To my great misfortune, unemployment was never again that low.

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