Economic Indicators
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- Category: Politics: Economics
- Date Submitted: 07/18/2011 12:31 PM
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Economic Indicators Research Paper
Unemployment
According to the Bureau of Labor Statistics the number of unemployed persons (13.9
million) and the unemployment rate (9.1 percent) were essentially unchanged in May. The labor
force, at 153.7 million, was little changed over the month. In May, the number of long-term
unemployed (those jobless for 27 weeks and over) increased by 361,000 to 6.2 million; their
share of unemployment increased to 45.1 percent. (BLS)
The economy is growing again and creating some jobs, but it is still not very promising
to the 13.9 million U.S. workers who remain unemployed. Though employment is increasing, it
is not increasing at a rate that will replace the millions of jobs lost during the recession for many
years.
However, the unemployment rate is a lagging indicator. This means it measures the effect
of a recession[->0] and so occurs after one has already started. It also means unemployment will
continue to rise even after the economy has started to recover. Employers are reluctant to lay
people off when the economy turns bad. For large companies, it can take months to put together
a layoff plan. Companies are even more reluctant to hire new workers when the economy
improves.
For that reason, the unemployment rate can only confirm what the other indicators are
already showing. For example, if the other indicators show a quickening economy, and the
unemployment rate is declining, then you know for sure businesses are confident enough to start
hiring again. Since it is a lagging indicator, unemployment can worsen even after the economy
starts to improve. In the last recession, unemployment went from 5.6% in 2002 to 6% in 2003,
even though the recession ended in 2002.(Unemployment)
These numbers are not very reliable as they are only counting the number of people who
actually looked for work. They do not include the number of those people who got tired of
looking and just gave up...
Unemployment
According to the Bureau of Labor Statistics the number of unemployed persons (13.9
million) and the unemployment rate (9.1 percent) were essentially unchanged in May. The labor
force, at 153.7 million, was little changed over the month. In May, the number of long-term
unemployed (those jobless for 27 weeks and over) increased by 361,000 to 6.2 million; their
share of unemployment increased to 45.1 percent. (BLS)
The economy is growing again and creating some jobs, but it is still not very promising
to the 13.9 million U.S. workers who remain unemployed. Though employment is increasing, it
is not increasing at a rate that will replace the millions of jobs lost during the recession for many
years.
However, the unemployment rate is a lagging indicator. This means it measures the effect
of a recession[->0] and so occurs after one has already started. It also means unemployment will
continue to rise even after the economy has started to recover. Employers are reluctant to lay
people off when the economy turns bad. For large companies, it can take months to put together
a layoff plan. Companies are even more reluctant to hire new workers when the economy
improves.
For that reason, the unemployment rate can only confirm what the other indicators are
already showing. For example, if the other indicators show a quickening economy, and the
unemployment rate is declining, then you know for sure businesses are confident enough to start
hiring again. Since it is a lagging indicator, unemployment can worsen even after the economy
starts to improve. In the last recession, unemployment went from 5.6% in 2002 to 6% in 2003,
even though the recession ended in 2002.(Unemployment)
These numbers are not very reliable as they are only counting the number of people who
actually looked for work. They do not include the number of those people who got tired of
looking and just gave up...