Unemployment has traditionally been considered a lagging indicator in a recession: the idea was that unemployment rises after economic growth falls off, and doesn’t recover until growth has picked up.
In the upcoming issue of D&S, John Millerpoints out that this time, the job losses struck first, so much so that the NBER (National Bureau of Economic Research, the official recession-dater) abandoned the standard metric (two consecutive quarters of falling GDP) and instead dated the recession to December 2007 based on the pace of job losses. In other words, unemployment is suddenly a leading indicator.
Arpitha Bykere comes to the same conclusion in Nouriel Roubini’s RGE Monitor:
Read the whole analysis here.