Robert Reich asks:
Shall We Call it a Depression Now?: Today's employment report, showing that employers cut 533,000 jobs in November, 320,000 in October, and 403,000 in September -- for a total of over 1.2 million over the last three months -- begs the question of whether the meltdown we're experiencing should be called a Depression.
We are falling off a cliff. To put these numbers into some perspective, the November losses alone are the worst in 34 years. A significant percentage of Americans are now jobless or underemployed -- far higher than the official rate of 6.7 percent. Simply in order to keep up with population growth, employment needs to increase by 125,000 jobs per month.
Note also that the length of the typical workweek dropped to 33.5 hours. That's the shortest number of hours since the Department of Labor began keeping records on hours worked, back in 1964. A significant number of people are working part-time who'd rather be working full time. Coupled with those who are too discouraged even to look for work, I'd estimate that the percentage of Americans who need work right now is approaching 11 percent of the workforce. And that percent is likely to raise...
U6--unemployed, plus discouraged workers, plus part time because they cannot find full-time jobs--is now at 12.5%.
As the authority on such matters, I hereby lay down the law: No, we cannot call it a depression yet. We can only call it a depression when the headline unemployment rate--U3--kisses 12%, or when the headline unemployment rate stays above 10% for 36 consecutive months.
I hope that this has been illuminating.