Robots and Sectoral Shifts

http://www.businessweek.com/articles/2013-02-11/will-robots-create-economic-utopia#p1

This article discusses the possibility of a major sectoral shift in the future due to increased advancements in the fields of automation and mechanization. This does have the potential to create structural unemployment which could leave many workers short of a job but historical trends suggests that this will not create any sort of disaster.

The economies of the developed world have already experienced major sectoral shifts in the form of the industrial revolution. It is hoped that while the coming sectoral shift may have consequences in the relatively short term - it will be beneficial in the very long run due to increased efficiency of capital which will contribute to improving the returns to labor based on the Cobb-Douglas production function. And with proper government intervention in the training of unskilled workers, new jobs can also sprout up to keep the natural rate of unemployment under control.

Egyptian Crisis takes its toll on the economy

http://www.bbc.co.uk/news/business-21343867

As a result of increasing instability in Egypt, the economy has seen its tourism sectors get crippled and a constant fall in foreign investment, both important earners of foreign capital.  The inflow of foreign currency allows for the government to pay for imports, like food and fuel. The government however hopes to convince the IMF, along with other international financial institutions, to provide a $ 4.8bn loan “to shore up finances” so that it can pay for its imports. This, on the other hand, may result in an increasing national debt and, in the future, Egyptian society may face austerity measures and other financial constraints as a result of conditions imputed by these institutions, although there is much to happen before that.

U.S. Consumer Sentiment Climbs

Hurray! This essentially menas people think the economy is doing well, which it is. According to the article, industrial production has picked up since a .1 percent slump in January. As well, there has been a climb in housing valuation, to be accompanied by lower mortgage rates. For more good news, stocks are climbing, improvements in the labor market are becoming apparent.

The article talks of only a few headwinds. Consumers are expecting inflation to increase to 3 percent, as opposed to 2.9 percent in the previous month. As well, President Obama's new policy is raising payroll tax to the 2010 level of 6.2 percent.

Although there are some negatives to come, things could be looking up.

Obama's Controversial Minimum Wage Proposal

http://www.washingtonpost.com/blogs/the-fix/wp/2013/02/13/the-minimum-wage-fight-explained/

In President Obama's State of the Union Address, he proposed the idea of raising the minimum wage to $9 an hour. While some find this increase dramatic and unnecessary, others are fighting to raise it even higher, up to $10 an hour. Most individuals are in favor of this increase, two-thirds of Americans and even half of Republicans. House Speaker, John Boehner, is opposed to this increase and thinks it will raise unemployment, which is likely if employers are forced to pay their employees more. Although this increase is quite controversial at the moment, it is important to keep in mind that a minimum wage increase will not effect very many people, mostly teenagers.

Indian Exports rise, snap 8-month fall

The article talks about the 0.8% rise in export levels of India in January 2013 , this rise was seen after a straight eight month decline. The imports increased by 6.1 % , the trade deficit has further widened to about $ 20 Billion in January .

The current account deficit is set to be at $87.9 billion which is 4.7 % of the country's GDP against the 4% or the $76 which was expected earlier. The regional bank of India is comfortable with the CAD in the range of 2.5-3 % but seeing this gap widen , policymakers are under pressure to boost the FDI to prevent the steep depreciation in the Indian rupee.

The government hopes that this increase in levels of export would help the situation but think that it is only marginal , and it should help narrow the trade gap at the end of the fiscal. The government has also offered sops to boost shipments from the country.

http://timesofindia.indiatimes.com/business/india-business/Exports-rise-snap-8-month-fall/articleshow/18491493.cms

Tesco's House Arrest-like Armbands

http://www.businessweek.com/articles/2013-02-13/tesco-monitors-employees-with-motorola-arm-bands#r=nav-r-story

This article describes how one Tesco's distribution centers requires all its employees to wear specially designed armbands. The devices are developed to measure worker productivity so closely that the technology also knows when they take a bathroom break.

Produced by Motorola, these armbands monitor every aspect of a workers activity; the device collects data on speed, competency, and then compares it to a benchmark that every worker must meet. The only time they are turned off is during the lunch break. Tesco refuses to disclose whether this technology has actually made its employees more efficient.

If this is the route that better and more efficient technology is on, then one can only imagine what kind of devices we'll be wearing when we enter the labor force...

Effects of deflation in Japan

The global economic crisis hit Japanese economy hard, making it contract for the third straight quarter at the end of last year. The decrease in external demand for Japanese products and a weak domestic demand (pushed down by deflation in the economy) were the reason why GDP declined. In order to reverse the effects of deflation, Japan´s new government approved a stimulus package of 10.3 trillion yen ($116bn), which includes investment in infrastructure and incentives for businesses to boost investment, resulting into the creation of 600,000 jobs and is estimated to grow the economy in 2%. At the same time, Japan´s Central Bank doubled its inflation targets to 2% in order to combat deflation, which has been negatively affecting Japanese aggregate demand, since consumers tend to push off purchases in hope to get a cheaper deal in the future.

Inflation relations with real wages

What inflation does to real wages

I think this article is an interesting one that is directly related to what we are talking about in class. In the article it speaks about how many people think wage rates increasing leads to the inflation rate increasing, where in actuality the real wage rates decrease in times of inflation. Michael Pento is the Senior Economist for Euro Pacific Capital, a pretty quick read as well as interesting, give it a look. 

Housing to drive economic growth (finally!)

http://money.cnn.com/2013/01/27/news/economy/housing-economic-growth/index.html?iid=SF_E_Highlight

This article discusses some details about how the housing market will most likely be the biggest driving force behind economic growth for this year. They said that the market will be at its strongest since before the recession. A particularly interesting concept that was also mentioned was the trickle down effect that will improve the overall economy because of this strong housing market. There will be a vast number of new homes being built and that will create new construction jobs and it will also increase jobs in the housing appliance industry. These new jobs will create a larger number of people with disposable income that will then spend it in the economy and stimulate economic growth.

Federal Medical Spending Costs Decreasing

http://www.nytimes.com/2013/02/12/us/politics/sharp-slowdown-in-us-health-care-costs.html?ref=us&_r=0

This New York Times article outlines a curious trend which has been revealed in figures published last week: the cost of medical care in the US has been rising much more slowly than projected. As a result, projections for future government spending have decreased greatly; by 2020, the government is expecting to save hundreds of billions on Medicare and Medicaid.

Reasons for the decline in health costs are subject for debate. Many argue that the fall in price is the result of changes in the way that doctors deliver medicine; skeptics argue that the trend is only the result of a slow economy.

This could be promising news for a nation with an overwhelming government spending deficit. If medical costs continue decreasing, healthcare can become more widespread while the budget deficit remains under control. We can only hope that these low costs aren't just another side effect of our currently-slowed economy.

U.S. Stocks approach nominal high

http://money.cnn.com/2013/02/10/investing/stocks-lookahead/index.html?source=cnn_bin

Many stock indexes are approaching their all-time highs. From the article, it appears that the writer means that they are approaching nominal all-time highs. I don't really have a strong desire to calculate the real values of the stock indexes, but if I had to guess I'd say that, in real dollars, the stocks aren't as close to their all-time highs. It is nice to see the financial markets are doing better, but I wish that more publications would use real prices when comparing stock prices from different years.

French Uprising

http://www.bbc.co.uk/news/business-21379071

In this article, it summarizes the predictions made by the French government's outlook on their economy.  They are speculating that it will experience .8% growth, and should be on the rise. This rise coupled with the fact that according to the Bank of France that the business confidence indicator is the highest it has been in a year, and they forecast the future output to be on the rise as well. This prediction differs from experts who seem to believe that France will be and has been on a sharp decline since 09' when their manufacturing data or output made its sharpest decline.

Oil Exports Trim U.S. Deficit as Fuel Gap Shrinks: Economy

http://www.bloomberg.com/news/2013-02-08/trade-deficit-in-u-s-plunges-on-record-petroleum-exports.html

Record oil exports helped The U.S. decrease its trade deficit in December t the smallest in almost three years. Oil exports went up to $11.6 billion and the trade gap decreased 20.7 percent to $38.5 billion. This vividly shows the trend towards energy independence and widely believed that greater fuel autonomy helps boost household incomes, jobs and government revenue.

A rise in U.S. oil production has made the nation the world's largest fuel exporter. Additionally, the U.S. met 84 percent of its own energy needs in the first 10 month of 2012 and crude output grew by a record 766,000 barrels. At the same time, the rising efficiency of the average U.S. passenger vehicle has lowered the demand for oil.

America's Improved Giant.

                http://www.economist.com/news/finance-and-economics/21571139-insurer-has-done-good-job-rehabilitating-itself-can-it-stand-its-own

This article is about how the insurance giant AIG has bounced back and become an even better company than before it was given its bailout by the government. In just four years AIG was able to free itself from the government’s $182 billion bailout that prevented the company from having to declare bankruptcy. Also another big step taken by AIG was the move to return itself back to back to private ownership instead of public so that it could rid itself of government ownership. However, as far as AIG has come there is still a lot of progress that needs to be made. As of right now their return on equity is at about 5%, which is among the lowest of all its American peers. AIG’s goal is to attain a 10% return on equity by 2015, a rate that would match most of its rivals. Unfortunately they have also had to “trim some of the branches of the tree” as Bob Benmosche stated earlier this year, this was in context to AIG drastically downsizing its work force from 116,00 down to about 62,000 in some 90 countries. The good news for AIG is that insurance rates in America are currently rising and show no sign of slowing down in the near future. 

Algeria's Oil and Gas: Not so Jolly
http://www.economist.com/news/middle-east-and-africa/21571480-recent-events-and-wariness-foreign-investors-dent-oil-and-gas-economy-not

    This article talks about how Algeria, one of the world's biggest oil producing regions, is not in the best shape concerning their position in the oil and gas market. Apparently it is being replaced as a main supplier of oil in North America by lesser quality and less expensive producers found in North Dakota - its markets are shrinking. It also has been too dependant on charging high prices. In natural gas, it is having a hard time as well. Local electricity needs in the country have been rising. This will be detrimental to exports as plans to build a new pipeline have been delayed.

     The author suggests the Algerian government can help, developing solar power as the solution for the higher demand for electricity and that some gas/oil reserves still have yet to even be found, the country having a good supply. However, Algeria is not rated well for its business friendliness.

Last month there was also a terrorist attack on one of their natural-gas complexes. This caused a multitude of problems, including raising business costs and a perhaps loss of companies. Even BP lost three of its employees to murder. As Algeria seems to be in a broken state, they are obviously going to need to take great strides and improvements to recover. Policy makers and the government have their work cut out for them.

China Eclipses U.S. as Biggest Trading NAtion Measured in Goods

http://www.bloomberg.com/news/2013-02-09/china-passes-u-s-to-become-the-world-s-biggest-trading-nation.html

Last year China surpassed the U.S. to become the world's biggest trading nation, as measured y the sum of exports and imports. U.S. exports and imports of goods in 2012 totaled $3.82 trillion, while China's trade in goods in 2012 amounted to $3.87 trillion. Analysts and economists are concerned that China's presence might disrupt regional trading blocs, like those in Europe.

China's economy has been growing at average 9.9 percent a year from 1978 through 2012. This is remarkable and unmatched by any other nation over this time period. Despite the constant growth China's economy is only half of U.S. economy, measured by GDP.

China became the world's biggest exporter in 2009, while U.S. remains the biggest importer in the world. Despite the data, some economists are skeptical about China's exports numbers, as China's customs administration reported an unexpected 14.1 percent export gain in December.

China has established its strong presence on the world market and despite skepticisms countries around the world will have to adjust to China's global presence by engaging in different trade blocs.

AMR, US Airways Said to See Merger Talks Into Midweek

This article deals with a huge merger between US Airways and AMR. The deal is said to be worth $11 billion and would create the largest carrier company in the world. This deal will be something to keep an eye on because of how big of a deal it is with money and just in general. Creating a company this big will be huge for the companies and will create an interesting situation with people's jobs as well...

British Monetary Policy

http://www.economist.com/news/leaders/21571138-how-bank-englands-new-governor-and-chancellor-should-stimulate-british

The British monetary policy is aiming to raise nominal GDP rate upto 10%.It is slowly achieving its goal pretty well.However, it should seriously consider whether it will help them in the long run or not.The rise in nominal GDP growth rate could have the opportunity cost of high inflation and eventual depriciation of the sterling.

http://economix.blogs.nytimes.com/2013/02/08/the-family-and-medical-leave-act-20-years-later/?ref=economy

The Family and Medical Leave Act, 20 Years Later

 In This Article Tyson discusses the Affects of the Family and Medical leave act, passed by Bill Clinton in his first term as president. Tyson believes that the act has been beneficial, Although the provided leave is unpaid, it ensures job protection and the extension of health insurance when workers are temporarily unable to work for medical or family reasons. Moreover, a just-published Labor Department survey finds that most employees who take leave for family and medical reasons receive partial pay (17 percent) or full pay (48 percent ) for short leaves (fewer than 10 days), often drawing on paid leave days they have accrued during the previous year. 

The Labor Department survey also reveals how American workers choose to use their rights under the law. About 16 percent of covered and eligible workers under the Family and Medical Leave Act took leave last year, a share comparable to that in 2000. About 5 percent reported that they needed leave but were unable to take it, primarily because they could not afford to sacrifice their pay. This is about double the share in 2000 when real median wages and family incomes were higher. About 57 percent of all leaves are taken by workers because of their own medical conditions, with another 22 percent for pregnancy or birth of a child and 20 percent to care for a sick family member.

Tyson believes that it is time to consider extending the Family and Medical Leave Act to provide all workers with access to paid family and medical leaves that are job-protected and include some financial support. Researchers at the Center for American Progress have outlined a plan, called Social Security Cares, to achieve this goal. Social Security Cares is a family and medical leave insurance program that would cover all workers for the same life events covered by the Family and Medical Leave Act and offer partial wage replacement. The Social Security Administration would administer the program, which would be paid for with a small increase in the payroll tax.

 

Apple living in the past?

http://www.economist.com/blogs/schumpeter/2013/02/apple

Ever since their scare with bankruptcy in the 1990's apple has been very fiscally responsible and also seem like they are still living in the depression era with the amount of money they keep stashed away. But recently they have seen huge increases in capital from their recent technological boom. Many of their shareholders are not happy with the amount they have saved up for extra which last quarter amounted to 23 billion dollars. That amount of money is obnoxious for something that they cannot control. Leaving their shareholders in the dark and feeling like they want more.

Growing Pains in Dubai

http://www.economist.com/news/finance-and-economics/21569036-gulf-emirate-flashy-ever-it-still-has-structural-problems

This article describes Dubai's aspirations to expand the economy by kicking off a massive project to "create a city within the city, a development bigger than anything that has gone before." However, this comes just three years after a financial crisis which threatened to cause the collapse of the entire economy. In addition, many economists feel that the city relies too much on outside sources for labor- only 10% of the working-age population is made up of nationals. Though the local economy has been improving (GDP is rising, the property market is improving, hotel occupancy rates at 80%) there is still some uncertainty that must be resolved in order for it to continue to succeed and grow in the future.

Currency Wars

Currency Wars
I found this article very interesting. In another economics class (Econ 387) we have been learning about matrix's to a zero-sum game, and when you think of those games you can't imagine the vastness of the matrix that would take place for this zero-sum game. All of the countries in the world have payoffs based on how they are doing, in this case winning or losing. I think this is a very interesting topic and wanted to share it with the class. 

http://www.aljazeera.com/news/europe/2013/02/20132615478654896.html
RBS, a major UK based bank has been fined $615 million for rate rigging, and has been found guilty of wore fraud in japan. the scandal involved twenty one traders in offices of london, singapore, and tokyo. These officials illegally manipulated the london interbank offered rate. This manipulation resulted in change in rate of trillions of dollars of loans given out in the UK as well as the united states. In an effort for a settlement, the bank agreed to plead guilty to wire fraud in japan, but managed to settle the charges in the United States and the United Kingdom. This scandal went on from 2006 to 2010. The interesting fact here is that the fine that the bank has to pay is so relatively small that the bank has planned to pay it simply by tapping into their employee bonuses. The manipulation of the LIBOR has had a big enough impact to have direct impact on global economy.

The Voice of Public Choice

The Voice of Public Choice

In this article from The Economist, the theories practiced by James Buchanan, who passed away on January 9th, are discussed and analyzed in respect to our current economic situation. Buchanan was the mastermind behind the "public-choice theory" which discusses how economic tools can help us deal with political problems. He was very much interested in the fact that the state had a growing importance in the field of economics due to national security concerns, corrupt business making, and national traumas like the Great Depression. This growing made it essential that we understand state decision making since its impact on the economy was growing as well. The main concern is that political figures are flawed people who are motivated by self-interest, not the interest of the state. They are no longer pressured to pair new spending with higher taxes, and they do a lot to increase the economy through government contracts. The fiscal cliff can be seen as an application of public-choice theory because the hard choice put on the government by the economy made policymakers confront these controversial issues because there was no alternative. There are two types of decision making applied by the government: a constitutional stage where ideals are upheld and then a politics-as-usual stage. What this article is basically saying is that as our government and economy are growing, they are becoming more intertwined and convoluted. This means that economists need to not only concentrate on the economy but also how state decisions impact it as well. The line between these two entities is being blurred and we should take note of this phenomenon to accurately understand our economy. 

Dude, Dell's going private

Times have been tough on Dell. They are finally making the move from public to private. So what does this mean to shareholders? Well, it depends on when you bought it...
It is a tough reality to face if you invested with long term value in mind. Shareholders are accustomed to selling when they want to, not being forced out by a company going private. Nevertheless, I think it is the right business decision. The system of mandated quarterly earnings reports corrupted corporate America. While it provides shareholders with an update on how the company is performing, they are improperly tweaked far too often to maintain stability within the markets. Dell was definitely feeling this pressure. Now that they will be private they can focus on the company and its future, as opposed to the satisfaction of its shareholders.

Wealth Tax

http://www.nytimes.com/2013/02/10/business/yourtaxes/a-wealth-tax-would-look-beyond-income.html?ref=economy

As the national debt increases everyday, there has been a significant increase in discussions about reforming the current tax laws.  One of the proposed ideas is to add a wealth tax on top of the income tax that is currently used by the United States.  Basically,  how this wealth tax would work is that every household would list all of their possessions yearly on a document which will then be valued by the government.  However,  only those who have over $3 million worth of valued assets would be subject to this wealth tax.  According to Ronald I. McKinnon, who is an economist at Stanford University, this wealth tax would only include the top 5% of the population is wealthy enough to own $3 million worth of items.  The overall goal of this wealth tax is to close some of the loopholes that some wealthy citizens use to pay less taxes (ie. off-shore banking accounts, etc).  This could turn out to be very beneficial for the economy if it is implemented properly.  

The Wrong Stuff

http://www.economist.com/blogs/schumpeter/2013/02/royal-bank-scotland-and-libor

This article talks about The Royal Bank of Scotland and how they were rigging their interest rates. Take traders at the Royal Bank of Scotland (RBS) were leaving trails of evidence in e-mails and audio recordings detailing how they set about trying to manipulate LIBOR. The RBS agreed to pay fines of $475m to American regulators and another £87.5m ($137m) to Britain’s Financial Services Authority. The scandal has hardened the views of regulators and politicians. The inadequate risk controls at RBS will reinforce a perception that some banks have become not merely too big to fail, but too complex to manage. 

Obama to Focus on Economy in State of the Union Address

http://security.blogs.cnn.com/2013/02/10/economy-not-foreign-policy-will-be-focus-of-state-of-the-union/

The article is a rather simple one, but I found it interesting nonetheless. Barack Obama announced today that the focus of his State of the Union Address will be the economy and NOT foreign policy as many had speculated. With recent talks about Afghanistan and amid criticism of US drone use, it looked like Obama might focus on foreign policy, but that won't be the case. In Obama's last four Congressional addresses, he's spent more than triple the time discussing the economy as he has foreign policy.

My goal here is not to start a political debate, but the article did make me wonder about government priorities. Obama is set to talk about job growth and the macro-economy--both very pressing issues (the economy ranks as #1 in the priorities of US citizens). The article made me look at the economy through a different lens. Undeniably, the state of the US economy is a very important issue, but is it being used here to dodge issues of US morality overseas?

Are government bond-markets in the euro zone recovering?

http://www.economist.com/news/finance-and-economics/21569727-government-bond-markets-peripheral-countries-are-soaring-time-celebrate

According to this article it appears that many peripheral countries in the euro-zone are experiencing positive trends in the purchases of government bonds, particularly in Spain and Italy. Both Spain and Italy's interest rates on ten-year bonds have dropped below 5%, which is 2.5 points lower than the previous years. With the increased sales in long term bonds some economic analysts say that the banks in the core parts of Europe will be able to payback 100-200 billion dollars of the 1 trillion borrowed from the European Central Bank as a stimulus package earlier in the debt crisis. Even the president of the European Central Bank, Mario Draghi, stated, "there is a positive contain sweeping through the Europe's Economy".

However, the bond-market alone is not an accurate representation of total economic recovery since unemployment in most European countries is still dangerously high and small businesses in most of these countries are suffering from lack of bank finance. Since these small firms are borrowing at such high interest rates they have to pay heavily for all money loaned and this ultimately reduces the total output of these euro-zone countries. The biggest issue this article raised with the possible turn-around of the European economy is that this "positive contagion"  represents a possible obstacle since most politicians in these countries need extreme circumstances to motivate action and without the heavy pressure to fix the economy, tough economic decisions regarding reform might be pushed off or set aside.

Eueopean Union Leaders agree on budget deal.

http://www.guardian.co.uk/business/2013/feb/08/eu-leaders-budget-david-cameron

The article above shows the timeline on discussions between EU member countries about the budgeted spending for the next 7 years. As can be seen above, complications arise because each leader is responsible for selecting the best plan for his country (the plan that best leads to economic growth and development of his country) and the member countries  of the EU are in different situations. England wants to see much higher spending cuts as does Germany but other countries want to see increased spending to stimulate activity in their ailing economies.

The advantages of the common currency (Euro) may be many but in times like this, member nations must surely miss the financial sovereignty of days gone by when budget agreements were not this difficult and drawn out.

Profound Weight of Layoffs Is Seen in Work Trends Survey

 http://www.nytimes.com/2013/02/07/business/profound-weight-of-layoffs-seen-in-survey.html?ref=economy

Everybody knows someone that has been greatly affected by the great recession because they either had a job and now are unemployed or took a job that is not compared to the amount they received as their previous pay check.  The unemployed that are still looking for 31 percent said their jobless benefits had run out and 58 percent said they were concerned their benefits would run out before they found work (Rampell).  For our economy to get back to where it was before “a majority of Americans say they think it will be at least six years before the economy is made whole again, if ever. Three in 10 said the economy would never fully recover from the Great Recession.” 

China's Inflation Rate Slowing

The inflation rate in China was consistently increasing for the last half of 2012, however January reports show a decrease in the CPI. Approximately one year ago, the country’s inflation rate was 4% or higher. Food pricing registered a slower rate of growth than in 2012 when the country was hit with rough weather that brought about an increase in pricing. Though it is not the only gauge, food pricing correlates with the estimated cost of living in China and represents a large portion of a family’s expense. The government hopes to see inflation rates drop to below 4% in 2013 and remain consistent with their average 10% growth in economic behavior over the past three decades. This expansion has propelled the nation to become one of the biggest economies with a growing middle class. However, this rate is hard to maintain for such a long period of time. Their economy must find a way to remain stable without the recession in Europe and the United States having too much of a direct impact.

http://money.cnn.com/2013/02/08/news/economy/china-inflation-cpi/index.html?iid=SF_E_River

The U.S. Economy Probably Grew After All, Thanks to Oil

Link: http://www.businessweek.com/articles/2013-02-08/the-u-dot-s-dot-economy-probably-grew-after-all-thanks-to-oil#r=nav-r-story

Due to more recent estimates on the fourth quarter of 2012, the net change in the size of the US economy seems to be minimal in either gains or losses instead of just a shrinkage. This is because of recent trade figures that have come into being that were not available during the previous estimation of our GDP. These gains on the initial estimation are said to be because of an almost 16 year low of the US's imports of crude oil coupled with a rise in fuel exports. To counter this though, lower than expected numbers on wholesale inventories were released by the government.

Since the Commerce's Bureau of Consumer Analysis puts out an estimate about a month after the end of each quarter, they have to make assumptions in order to fill the holes by the data that has not yet been collected. Because of the counteractive nature of these two new trade releases, the net change in our GDP will be small whether or not it shrinks or grows.

The U.S. Long-Term Unemployment Crisis Stumps Economists

According to the U.S. Labor Department 38 percent of all unemployment in the U.S. comes form long-term unemployment. This is triple its average from the years 2001 to 2007. According to the article an applicant looking for a job, who has been out of a job for the "long-term" is less likely to be considered for a position, than an applicant who has only had "short-term" unemployment. Evidence of this is seen when examining that the short term unemployment rate only being .7 percent higher than average.

http://www.businessweek.com/articles/2013-02-07/the-u-dot-s-dot-long-term-unemployment-crisis-stumps-economists#r=nav-f-story