I also pointed out that rising unemployment in manufacturing can be offset for a time by rising employment in industries placed at or near the point of consumption. Moreover, we must not overlook the possibility that reduced working hours, temporary plant closures and labour hoarding may be blunting for now the unemployment effects of a manufacturing contraction. This would artificially depress the unemployment rate. And yet commentators tell us there is nothing to worry about even as they admit that manufacturing is in a hard-pressed state. No matter, is their response because going into recession at or virtually at full employment tends to contradict historical trends.
Trends have nothing to do with it.
There is nothing to say that full employment is some kind of protection again recession. For example, unemployment was 1.3 per cent in 1920. A financial crisis saw the figure leap to 11.3 per cent in 1921. Coming to 1929 we find that unemployment stood at 3.2 per cent. The rest, as we know, is history.