Sunday, January 18, 2009

Could Be A Lot Worse. WAS A Lot Worse in 1980s.

yes, things were worse, felt worse, and people were aware of it. Micigan unemployment was over 25%, 1 in 4 was out of work.

Consider the following comparisons of key economic variables today to the peaks for those variable in the early 1980s (see graph above):

Prime Rate
1981: 20.5%
2009: 4% (Current)

1980: 14.8%
2008: 0% (December)

Unemployment Rate
1982: 10.8%
2008: 6.5% (December)

30-Year Mortgage Rate
1981: 18.5%
2009: 6.04% (Current)

Real Gas Price (2008 dollars)
1981: $3.45 per gallon
2009: $1.82 (Current)

Bottom Line: When it comes to the current state of the economy, it could be a lot worse. It WAS a lot worse in the early 1980s, by the five key economic variables above: prime rate, inflation, jobless rate, 30-year mortgage rate and real gas prices.

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Paul Banbury
(512) 497-8505

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