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The Inexorable Recoveries of U.S. Unemployment

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  • Robert E. Hall
  • Marianna Kudlyak

Abstract

Unemployment recoveries in the US have been inexorable. In the aftermath of a recession, unless another crisis intervenes, unemployment continues to glide down. Between 1948 and 2019, the annual reduction in the unemployment rate during cyclical recoveries was distributed around 0.1 log points per year. The economy seems to have an irresistible force toward restoring full employment. Occasionally, unemployment rises rapidly during an economic crisis, while most of the time, unemployment declines slowly and smoothly at a near-constant proportional rate. Similar properties hold for other measures of the US unemployment rate and for unemployment in emerging and advanced countries.

Suggested Citation

  • Robert E. Hall & Marianna Kudlyak, 2022. "The Inexorable Recoveries of U.S. Unemployment," Working Paper Series 2021-20, Federal Reserve Bank of San Francisco.
    • Handle: RePEc:fip:fedfwp:93023
    DOI: 10.24148/wp2021-20
    Note: Original publication date: 9/7/2021.
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    References listed on IDEAS

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    1. Richard K. Crump & Stefano Eusepi & Marc Giannoni & Aysegul Sahin, 2019. "A Unified Approach to Measuring u," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 50(1 (Spring), pages 143-238.
    2. Victoria Gregory & Guido Menzio & David Wiczer, 2020. "Pandemic Recession: L- or V-Shaped?," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 40(01), pages 1-31, May.
    3. Andreas Hornstein & Marianna Kudlyak, 2019. "Aggregate Labor Force Participation and Unemployment and Demographic Trends," Working Paper Series 2019-7, Federal Reserve Bank of San Francisco.
    4. Shigeru Fujita & Giuseppe Moscarini, 2017. "Recall and Unemployment," American Economic Review, American Economic Association, vol. 107(12), pages 3875-3916, December.
    5. Cole, Harold L & Rogerson, Richard, 1999. "Can the Mortensen-Pissarides Matching Model Match the Business-Cycle Facts?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(4), pages 933-959, November.
    6. Robert E. Hall & Marianna Kudlyak, 2022. "Why Has the US Economy Recovered So Consistently from Every Recession in the Past 70 Years?," NBER Macroeconomics Annual, University of Chicago Press, vol. 36(1), pages 1-55.
    7. John G. Fernald & Robert E. Hall & James H. Stock & Mark W. Watson, 2017. "The Disappointing Recovery of Output after 2009," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 48(1 (Spring), pages 1-81.
    8. Hamilton, James D, 1989. "A New Approach to the Economic Analysis of Nonstationary Time Series and the Business Cycle," Econometrica, Econometric Society, vol. 57(2), pages 357-384, March.
    9. Hall, Robert E. & Kudlyak, Marianna, 2022. "The unemployed with jobs and without jobs," Labour Economics, Elsevier, vol. 79(C).
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    Cited by:

    1. Paul Romer & Roberto Samaniego & Remi Jedwab & Asif M. Islam, 2025. "Scars of pandemics from lost schooling and experience: aggregate implications and gender differences through the lens of COVID-19," Journal of Economic Growth, Springer, vol. 30(1), pages 1-47, March.
    2. Hall, Robert E. & Kudlyak, Marianna, 2025. "The active role of the natural rate of unemployment," Research in Economics, Elsevier, vol. 79(4).
    3. Mark W. Watson, 2025. "Comment on "Tradeoffs and Sacrifice over Rate Cycles: Activity, Inflation and the Price Level" 2," NBER Chapters, in: NBER Macroeconomics Annual 2025, volume 40, pages 291-297, National Bureau of Economic Research, Inc.
    4. Hall, Robert E. & Kudlyak, Marianna, 2022. "The unemployed with jobs and without jobs," Labour Economics, Elsevier, vol. 79(C).
    5. Andrew Fieldhouse & Sean Howard & Mr. Christoffer Koch & David Munro, 2022. "A New Claims-Based Unemployment Dataset: Application to Postwar Recoveries Across U.S. States," IMF Working Papers 2022/117, International Monetary Fund.

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    More about this item

    Keywords

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    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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