Saturday, 4 October 2008

Another economic miracle

US unemployment has risen steadily since the housing market peaked in 2006. The rate has just crossed the six percent line, and is now as high as it was during the last economic downturn in 2001-02. However, unemployment has risen without an economic slowdown. According to GDP data, the US economy just keeps growing.

This is very strange; the US is now experiencing non-recessionary unemployment. In other words, the economy is getting bigger but it needs fewer workers.

6 comments:

Anonymous said...

Alice,

We are living in Wonderland over here. Bush is our Harding with one of these idiots about to become our Hoover. We are so screwed it isn't even funny. My only solace is we are taking the rest of the world down the rabbit hole with us. See you with the Red Queen.

Sequoia


If we don't get credit flowing again this suckers going down.

Our beloved leader of the nukular age George Anheiser Bush

mitch said...

sounds like someone is fiddling the figures.

Anonymous said...

Economy getting bigger with fewer workers - classic deflation through increased efficiency of industrial processes, ultimately leading to overproduction and depression, maybe. It has happened before. B. in C.

Anonymous said...

Bah. Never heard about Okun's law?

Actual GDP growth below potential growth causes higher unemployment rates. Allow for some time lags between activity and unemployment, and it ain't weird.

/Pecanpaj

Anonymous said...

Don't forget that US employment figures don't count "discouraged" workers and those whose unemployment benefits have run out.

This means that the actual numbers not working have risen for a number of years - just quite a few of them haven't been counted.

See here for a little treatise on the subject.

Anonymous said...

Just read that 94% of all new job growth in Canada in the past five years has been in construction. And now their construction sector is going bust. Hmm? Maybe too much was put into the housing bubble, when we should have been starting intelligent businesses?