When does it become an economic depression?

[Exapno_Mapcase]

@Really_Not_All_That_Bright

Prior to the Great Depression, depression and recession were used interchangeably, and depression was in fact the more common term.

I need a cite on this.

[dre2xl]

@Beware_of_Doug

IIRC, one survey in 1932-33 (unscientific, the only kind there were then) said 59% of those employed were on some kind of short time. That left only 16% of the workforce - *less than one person in six *- employed full-time, presumably at greatly reduced pay.

That does prompt the question of how this compared to before the Great Depression, though. Agricultural, construction, and other unskilled jobs are very seasonal.

There’s also a school of thought that says “if we calculated unemployment now as we did in 1933, the rate would be about double.” FWTW; is that worth looking into, or can it be easily pulled apart?

That is certainly an oft-repeated meme among the bears, but I haven’t found any cites on it. We started keeping track of discouraged workers (e.g., those not seeking a job) in 1994. But there doesn’t seem to be any great decline in unemployment, which makes me think we’ve always defined unemployment as people searching for a job and doesn’t have one: http://www.bls.gov/webapps/legacy/cpsatab12.htm

Official unemployment statistics were 7.3% in Jan 1993, 6.5% in Dec 2003, and 6.6% in Jan 2004.

The unemployed + discouraged workers were 8.1% in Jan 1994, unemployed + discouraged + part-time workers were 11.8% in Jan 1994.

Given the smooth and consistent official unemployment rate over the time period that we began measuring discouraged/underemployed/part-time workers, and absence of any hard cites to the contrary, I think it’s much more likely that the BLS has been measuring unemployment consistently all along.