Written by Constantin Gurdgiev

The scariest chart compares the Employment Index plots for each of the previous eleven recession-recovery cycles since World War II.

Despite some positive headline numbers on some labor market metrics, jobs creation in the U.S. is not progressing well-enough to claim any end in sight for the COVID19-induced recession. Current reading for jobs index, relative to pre-recession highs is woeful. So woeful, today's state of U.S. markets ranks as the second worst jobs recession in modern history, so far, worse than the Great Recession.

Good news is that in March, pace of recovery accelerated from a major slowdown experienced in the first two months of 2021. The bad news is, unless this pace is sustained, we are risking a scenario where unprecedented policy (fiscal and monetary) supports unleashed since the start of 2Q 2020 will be associated with a jobs recovery that is second-third worst in the modern history of U.S. recessions.

Time will tell.

Two other charts are included on the scariest list.

New Unemployment Claims

Here we have new unemployment claims through March 20, 2021, with the last two weeks of data being preliminary estimates. In the week through March 20, 2021, new unemployment claims fell to 656,789, or four weeks running total of 2,892,799 dipping below the peak of the Great Recession levels of 4 weeks total of 3,313,000. This is the good news.

The bad news is that latest reading would rank 58th worst in the history of the weekly series, if we are to exclude the COVID19 period. Another part of the bad news is that last week's weekly rate of decline of 100,412, the fastest rate of decline in four weeks, is actually slower than average weekly rate of decline for the pandemic period.

If this lower rate of change were to continue it would take more than 30 weeks to get back to the pre-pandemic lows for new claims.

Increasing Duration of Unemployment

Another one of the America's Scariest Charts - a long-term running issue I have been highlighting for a number of years now - is roaring back to prominence as COVID19 pandemic crisis continues to impact U.S. labor markets across virtually all possible metrics of health.

Here it is: the average duration of unemployment episodes:

Unemployment episodes become short at the start of the recession as new vintage unemployed join the ranks of long-term unemployed. As the recovery sets in, unemployment duration starts to take into the account a different and changing mix of those on unemployment: the share of total unemployed who are short-term unemployed shrinks, the share of the longer-term unemployed rises. Secularly, however, virtually every past recession since 1970s on has resulted in a long-term increase in average duration of unemployment during the recovery phase of the business cycle. In other words, the longer-term unemployed became even longer-term unemployed. And now, the COVID19 pandemic joins the line of past recessions with continuing on this trend.

Note added by Econintersect: The discontinuities in U.S. employment data in this recession are unprecedent in the last 75 years. How long the recovery will take and what will be the long-term damages remain to be determined.