50 years of US unemployment: Biden has inherited the reins of a fragile economy — we get some historical context
Joe Biden is officially in the Oval Office. In his first few days as President, Biden focused his attention on repealing a number of Executive Orders put in place by his predecessor, before turning his efforts towards the country's coronavirus response.
A fragile, but recovering economy
Once COVID-19 is under control Biden's primary focus will likely turn to the US economy, which is in a fragile, but not critical, state.
The Bureau of Labor Statistics pegs the latest US unemployment rate at 6.7%. Incredibly, that's actually down from the 14.8% that it peaked at back in April of last year — a testament to how far the economy has come in just 8 months.
Relative to history, an economy with an unemployment rate of 6.7% is actually fairly **un**remarkable — the average for the last 50 years is 6.2% and many past presidents have taken the reins of an economy in much worse shape. Reagan entered the office with unemployment at 7.4%, Clinton at 7.1% and Obama took over as unemployment was climbing towards 10% during the depths of the global financial crisis at the start of '09.
Okay — so not too bad then?
The issue is whether the sharp rebound continues. If you look at the data on total number of people employed, the economic recovery looks like it has flatlined. Similarly, more recently available data (such as unemployment claims) remain painfully high.
The glass-half-empty view is that once the huge stimulus packages injected into the economy subside, with some provisions expiring in mid-March, the economy could collapse again.
The glass-half-full argument is even simpler: people are going to go mad for all of the things they have missed (holidays, dining out etc.) — and many have been saving over the last 10 months.
