How to Tell if a Recession is Coming – A measure that focuses on the unemployment rate

Dropouts – Leaving education during a recession has severe impacts

The financial crisis led to the biggest recession in living memory: output fell by almost 5 per cent, a bigger drop than in the downturns of the early 1990s or early 1980s. As in previous recessions, younger people bore the brunt of this: the unemployment rate for those aged 18 to 29 rose by 4 … Continue reading →

Recession in US – Most NABE economists expect it by the end of 2021

“Survey respondents indicate that the expansion will be extended by the shift in monetary policy, and most expect the next economic recession will occur later than anticipated when the February policy survey was conducted,” said NABE President Constance Hunter, CBE, chief economist, KPMG. “Of the 98% of respondents who believe a recession will come after … Continue reading →

Outlook for 2019 in US – A likely recession ?

The longest expansion in our history lasted ten years (March 1991 to March 2001), and the current one will match that milestone in mid-2019. This expansion was already in its eighth year when Trump took office; and as I’ve noted here and elsewhere, all business cycles eventually expire from old age unless they are struck … Continue reading →

Recessions in UK – Persistent scarring effects on employment and earnings

This paper estimates the effects of entering the labour market when the economy is weak on subsequent living standards using consistent long-running household survey data from the UK. In line with previous research, we find persistent scarring effects on employment and earnings. However, we also provide the first estimates of impacts on net household incomes … Continue reading →

Matching to First Jobs – Informal hiring channels are more important in the job matching process during recessions than in booms

A large and active empirical literature has asserted that informal hiring channels can provide firms with information about worker qualities. Informal hiring channels mitigate the inherent uncertainty faced by recruiting firms and thus reduce firm-level hiring costs. But the existence of informal hiring channels may also dampen aggregate labor market fluctuations if recessions provide firms … Continue reading →

The Great Recession in US – 5 Ways how the workforce has changed

Here are five ways in which the U.S. workforce has changed since the onset of the Great Recession. A smaller share of Americans are in the labor force. In December 2007, two-thirds (66.0%) of civilians ages 16 and over either were employed or actively looking for work; as of October of this year, only 62.7% were. The … Continue reading →

Skills – The Great Recession drastically changed what employers want

The employment shift from occupations that require mid-level skills toward those at the high and low ends is one of the most important trends in the U.S. labor market over the past 30 years. Previous research has suggested that a primary driver of this job polarization is something called routine-biased technological change (RBTC), an unfortunate … Continue reading →

Automatic stabilizers in US – A major tool the government uses to respond to recession (video)

Automatic stabilizers—mechanisms built into the federal budget that increase spending or decrease taxes when the economy slows without any vote from Congress– are a major tool the government uses to respond to recession. For instance, spending on unemployment compensation automatically increases when there are more people out of work. During the Great Recession, automatic stabilizers … Continue reading →