Chart of the day: unemployment as a recession indicator

Is the U.S. in recession or not?

Well, the U.S. printed a 3.3% number for growth in the second quarter according to the data released last week. Since then, I have been asking myself why we shouldn't believe the U.S. is in an expansion right now. After all, the economy does not normally grow 3.3% during recessions.

But as I looked at all the other data outside of the GDP number, it all pointed to recession. In particular, the employment data paint a recessionary picture.

We are pretty fortunate to have nearly 80 years of monthly data on unemployment to use as a historical backdrop. So I have put together the U.S. unemployment data in charts by decade to see what happens to unemployment before, during and after recessions and what type of employment picture characterizes expansion...

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