Cause of Unemployment

What were the causes of high UE during the Great Recession?  Well, it isn't getting fired.

The red line here is layoffs times 4 to rescale and make it clear that total unemployment increases first and then layoffs follow.  Here it is again with the UE rate instead of total unemployed.

Layoffs are a normal part of a healthy economy, some people are bad fits for their jobs, some jobs are bad fits for the economy or company and some companies are badly run, shifting people into more productive roles is crucial for economic growth.  Layoffs during the great recession lagged, they took longer to move out of their prior range than most other indicators.  You might think that such a relationship was obvious (employers aren't prescient and generally don't like to fire people in general) but most theories off the GR require the opposite, and so the opposite is believed.  For example 

The economy surely saw what was, fundamentally, just a reshuffling of financial players and asset ownership as a sure sign (a very bright sunspot, if you will) that bad times were here again. The reaction was shift. Employers laid off their workers in droves to lower their payrolls before their customers stopped arriving. This was the worst of the many types of multiple equilibria associated with the GR.  

New home sales had been falling for 3 years before layoffs spiked and auto sales had been falling for a year+.  Other sectors differed, restaurants saw an end to a long growth in terms of total receipts in late 2007/early 2008.  They did see a decline after September 2008, but the break from trend occurred well before that.

All retail sales minus food service saw a break from trend prior to 2008, and saw early declines before the masses of layoffs in late 2008.