Table 3 Lifecycle of the Expansion
14
6/20
12
10
9/09
9/20
8
6
4
2
0
38
38.5
39
39.5
40
40.5
41
41.5
Average Weekly Hours
Description: • Table 3 plots the unemployment rate against average weekly hours in manufacturing on a quarterly basis since the beginning of the current economic expansion in September 2009. • There are four phases: 1. In the initial phase of an expansion, unemployment is stable and remains high while there is a sharp rise in hours per week 2. In the second phase, the unemployment rate falls while hours per week tend to be relatively stable. • This graph visually demonstrates how the impact of the pandemic on the economy sharply differs from the more incremental changes that occur during a “normal” business cycle. In 2020 Q1, we see an increase in both the unemployment rate and average weekly hours which likely reflect the early effects of the pandemic in March. For 2020 Q2 (6/20), we see a much more dramatic impact of the pandemic with unemployment skyrocketing and average weekly hours dropping. For 2020 Q3 (9/20), we witness a rebound in economic activity, leading to a significant decrease in the unemployment rate and an increase in average weekly hours. 3. In the third phase, the unemployment rate is stable and hours per week decline 4.A contraction occurs when unemployment rises and hours per week falls Analysis:
Central Wisconsin Report - Fall 2020
9
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