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(The Glass is Half Full; not Half Empty)
The good news that employment declined less in August than in previous months is more important than the bad news of the rise in the unemployment rate. As I've noted here previously, the unemployment rate (from the household survey) had not kept up with employment losses and a convergence was over due. It should not be considered new bad news. The unemployment rate will rise further, even if employment losses continue to decline. One reason is that discouraged workers will come into the labor force as their perceived prospects improve. Keep your eye on employment rather than unemployment as a measure of how the economy is doing.
One Response to “Today’s Employment/ Unemployment Report”
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September 22nd, 2009 at 3:54 pm
You’ve obviously been drinking too many of those half-full glasses of something very strong. We haven’t seen the worst of the unemployment/employment figures yet. Mark my words, this thing will get extremely worse as the unemployed worker’s taxes no longer hit the coffers. What then? Borrow more money from other more stable countries? Our grandchildren will rue the day this administration started spending like “drunken sailors!”