Unemployment rates over the last 60 years

[charlz]

My 401K is buying stock right now. Its low priced. It will go up again. In hindsight I should have moved the current 401K investments from stock to something more secure. The money going into the 401K from the current paycheck would be buying cheap stock. For me its too late to sell but the 401K is buying.

Yep, it would have been nice to have moved all my 401k funds into a Treasury fund or something a year or more ago. I have changed my future contributions to 100% stocks. I have not yet decided if I want to realize the losses on other parts of my 401k (sell) and roll those funds into stock... seems like a 'bet the farm' kinda deal and I am not so sure. Only 40 though so I have time to recover if it turns out very poorly.

 

[IH3444]

The DJIA fell from over 400 in 1929 to as low as 50 in 1933 prior to increasing in value by some 800% in the next 20 years. Those who called a top in the DJIA in 1954 were very wrong despite the DJIA having risen some 800%. Subsequently it rallied from 400 in 1954 to over 1000 on 1966.

http://www.marketoracle.co.uk/Article3967.html:)

http://articles.moneycentral.msn.com/Investing/JubaksJournal/the-new-financial-bubble-is-here.aspx

 

[turbo36]

Interesting chart.

I was curious about the average unemployment rate for those 61 years. The quick spreadsheet says the average was 5.6%. The site also has inflation for the same time period with an average of 3.83% which last year was 3.85%.

Last year we went passed the average to 5.76% Listening to the press over the last few years one would think it was much worse than it really was. Course we are on the uptick in unemployment and inflation so the question is how high will they go?

Since the numbers were in the spreadsheet I went and did a line graph overlaying the inflation and unemployment numbers. There are time when unemployment goes up and inflation goes down. The last time the two were unlinked looks like back in the 1950s. Since then the unemployment and inflation go hand in hand so inflation is about to go up.

Before looking at the inflation and unemployment in a graph we have been planning for a time of high inflation and interest rates. I wish they had the interest rates on the website since it would be interesting to put in the graph. But I think the interest rates will trend with inflation and unemployment.

There was a chart in the WSJ late last year that covered the ups and downs in the market. We seem to be in a bear market aka down turn. These last roughly 10-20 years. We might have another 2-5 years before the cycle up ticks again.

Given that Congress is about to spend a trillion dollars as a down payment in a stimulus aka pork spending spree I don't see how inflation is not going to go up drastically. Unless someone in Congress gets some sense, what are the chances of finding sense in Congress in enough numbers to stop this madness, we is going to get some higher prices. I would guess our grocery bill has gone up at least 20-30% over the last 4-6 months. Going to get worse I'm afraid.

To put a Trillion dollars in perspective if you equalize a dollar of today with a dollar in the 1940s, WWII cost FOUR trillion dollars. Congress is about to spend 25% of WWII and if you think they are done I have a bridge for you to buy. The states want another trillion. I guess spend a billion here, spend a billion there, and pretty soon you have spent some real money.

We sign off on our ReFi next week. It will remove our variable rate line of credit and give us a 4.5% 30 year mortgage.

Later,
Dan

If you look around on this site you will see other charts that overlay the inflation rate on the Unemployment rate to create what was referred to as the misery index. I don't see the exact correlation that inflation always rises with unemployment. I believe the inflation rate is more tied to world events IE wars, energy crisis and thus the inflation is result of a financial event and the unemployment the lagging outcome.


keep in perspective that as a percentage of GDP 4 trillion in the 1940's is much greater then 4 trillion today. Not saying a trillion dollar proram isnt a lot of money but in realtive terms it's managable. The last declared cost for the B-2 bomber was 1.4 Billion each so think of the stmulus package as 714.28 B-2 Bombers.

 

[2manyrocks]

In fairness to the OP, I have to say I am also trying to think through what I need to do. Everyone's personal circumstances differ so much that what might be an acceptable risk for one person might be too much risk for the next depending on what a person has saved up and what obligations that person has to face.

charlz brought up the issue of deflation. Until the economy took this downturn, I was more concerned about us going into back into high rates of inflation due to the run up in fuel costs. Maybe there is some benefit to the downturn in not having so much wealth being transferred out of the US to buy oil, but obviously that doesn't help someone who has lost a job because of the downturn.

 

[Timber]

Their is never any benefit to an economic down turn, it is how ever an unchangeable cycle. It will always rise and fall, people will win and people will lose. I have been through a few cycles now as an employer. This time my responsibility's are on a much larger scale. I had to let an employee go today because I turned in 1 of my lease tractors, 1 of several company wide. I have 2 more up on lease next month & will probably let another driver go then & that is just my division, we have this going on in other locations as well. It is difficult to terminate good people do to economic cut backs. We are faced with circumstances where companies are starting to consume our selves to survive, cutting off our own hands and feet just to ride out the storm & in the process contributing to the problem. I have made hard choices that break my heart but is my responsibility & job to position my operation into a survival mode for the good of many people. It is easy to run a company in good time with plenty of money & resources. I don't sleep well these days, I do my job to the best of my ability's, I make choices nobody wants to make, I become creative with my assets. I have hand picked all of my employees my self and assembled a great team that will do anything I ask of them. I control the future of everyone of them & will make choices that will bring them through this crises. sadly some will pay the price. Today I pay the price for what I have done & someone through no fault of their own had to loose. It has been a bad day for me, I should go to bed I think to put it behind me. Good night everyone

 

[turbo36]

Their is never any benefit to an economic down turn, it is how ever an unchangeable cycle. It will always rise and fall, people will win and people will lose. I have been through a few cycles now as an employer. This time my responsibility's are on a much larger scale. I had to let an employee go today because I turned in 1 of my lease tractors, 1 of several company wide. I have 2 more up on lease next month & will probably let another driver go then & that is just my division, we have this going on in other locations as well. It is difficult to terminate good people do to economic cut backs. We are faced with circumstances where companies are starting to consume our selves to survive, cutting off our own hands and feet just to ride out the storm & in the process contributing to the problem. I have made hard choices that break my heart but is my responsibility & job to position my operation into a survival mode for the good of many people. It is easy to run a company in good time with plenty of money & resources. I don't sleep well these days, I do my job to the best of my ability's, I make choices nobody wants to make, I become creative with my assets. I have hand picked all of my employees my self and assembled a great team that will do anything I ask of them. I control the future of everyone of them & will make choices that will bring them through this crises. sadly some will pay the price. Today I pay the price for what I have done & someone through no fault of their own had to loose. It has been a bad day for me, I should go to bed I think to put it behind me. Good night everyone

Timber, we share the same story, I laid off 1/3 of my workers over the last two weeks and will do more over the next two weeks, most likely 1/2 will be gone before it is over. These are people who have been with me since I started the company 22 years ago. I watched them raise family's and took get pleasure in knowing that I helped them grow and they helped me grow. The pain you feel now shows the love you have for these people if it becomes easy to discharge people then that means you are dead inside and should get out.

You will get over the pain, the economy will recover and you will have the opportunity to rehire these folks again. Peace.

 

[dmccarty]

...

keep in perspective that as a percentage of GDP 4 trillion in the 1940's is much greater then 4 trillion today....

The 4 trillion dollar cost of WWII is in adjusted dollars. GDP can be used to compare the two time frames as well but I don't have those numbers.

If one graphs unemployment and inflation numbers its pretty obvious that inflation goes up or down and shortly there after unemployment follows. Except for a period back in the 50's when inflation was doing a strange wave pattern.

The graph won't cut and paste for some reason. Could not save it to a jpg either.

Later,
Dan

 

[bumpercrop]

I don't think we are in that bad of shape.

Now days, people are more likely to go to the government for help, hand-outs, or welfare. This boosts the number of unemployment claims. Years ago, people did not run to the gov't. In addition, the gov't offers more than they did decades ago. This prompts people to reapply to these programs, once again boosting these numbers.

Let's say we've lost 1 million jobs. How many millions now make a living from the internet and have not been added to any payroll.

To make a long story short - I think we are doing alright. I do business with a wide variety of people from around the US - they are all running 'wide open'.

There are people suffering. Today, suffering means they don't have enough gas to run their 3 cars or enough electricity to power their 4 tv's.