Updating the unemployment chart

The official statistics continue to show that the U.S. job market is healthy (for example, here). The unemployment rate has been around 4% for a few months, which is the lowest it's been for several cycles. In this chart, I encoded the unemployment rate using a red-blue color scale. Red dots indicate months of high unemployment rate, which has spiked to 10 percent in 2010 and over 14% during the Covid-19 pandemic. Notice that in good times, the unemployment rate generally improves to about 4 percent. This level has been reached three times since 1990. It turns out that there are many roads that lead to Rome. An unemployment rate of 4% in 2001 is materially different from an unemployment rate of 4% in 2020. The aggregate statistics hide what is happening underneath.I previously designed the following chart depicting two important aspects that help us interpret the aggregate unemployment rate. It's important to realize that the unemployment rate is not the number of unemployed divided…