http://www.economist.com/news/finance-and-economics/21596529-americas-labour-market-has-suffered-permanent-harm-closing-gap
There was great optimism that American economy was healing and recovering but when job growth slowed sharply in December there was little optimism left. Although the unemployment rate says something different. Unemployment rate dropped to 6.6% in January from 7% and could soon hit the 6.5% threshold the Fed has. The Fed and other researchers have downplayed these numbers and say the unemployment rate is not a good example of how the economy is going. Some say the unemployment rate is significant and it is saying that American labor market is permanently stunted and the economy is operating at closer to its potential. The labor participation rate is also down. Policy makers will need to put more effort into making the long term unemployed employable again.
I think that incresing the unemployment is good signal for the U.S economy at least,but
ReplyDeletethe labor participation rate is also down,so we carefully have to watch the data. the long term unemployment rate is still bad, and the goverment still cannot find the good solution.
Also, I am concerned about the economic sanctions for Russia, which can affect the U.S economy.
In addition to recent events in Eastern Europe, the continuing debates about the federal minimum wage also contribute to falling rates of labour force participation. Unemployment has been slowly creeping downward, but the feeling in the economy does not seem like we are in a recovery period. Continual European crises and partisan politics don't help, of course.
ReplyDeleteInteresting article. I just read an article on the Russians moving their money awaiting the sanctions that it will receive. You have to wonder what impact this could potentially have on the U.S. economy.
ReplyDeleteThe key statistic is the decrease in the labor force participation rate. More people have either given up on searching for employment or are currently receiving unemployment benefits. In order to increase labor force participation the government should restrict the unemployment benefits it distributes. After the labor force participation increases, analyzing the unemployment rate would provide more insight into the economy as a whole, as it accounts for a larger portion of the population.
ReplyDeleteAt a 6.6% rate of unemployment, I sure hope our economy is not near to reaching its full potential. I do not think that our labor market is permanently stunted, but it will take time and effort to get unemployment back down to an acceptable rate. I agree that the key statistic is the decrease in the L-POP. The government has been subsidizing out of work citizens with many unemployment benefits and these benefits must be decreased in order to regain the productivity of our labor force and see results in the economy.
ReplyDelete