The U.S. unemployment rate has been reaching record lows recently. In fact, the unemployment rate dropped to a 2 year low of 3.8% in February. Claims for state unemployment benefits have dropped by 28,000 to 187,000 claims. This is the least number of claims the U.S. has seen since September of 1969. The reason for such low unemployment rates is the influx of government spending which was used to attempt to offset the pandemic. It appears to be working well, seeing that unemployment claims reached a record high less than 2 years ago. It is unlikely that the unemployment rate will remain this low due to the economy being unable to maintain such a large output of goods.
Sammy, excellent piece of writing. I liked how you included the cause of drop in numbers, the influx of government spending which was used to attempt to offset the pandemic. As said in class, Liberal parties focus more on government spending. It's neat to see that there are multiple paths to economic success.
ReplyDeleteI also think that the unemployment rate will eventually increase as time goes on, since we are so much lower than the natural rate of unemployment currently. Since the Fed has just increased the interest rate, I wonder if this increase will cause unemployment to start rising soon, or if it won't have a large effect of unemployment numbers in the short run.
ReplyDeleteUnemployment has been at low rates recently because the government increased spending to help the economy during the pandemic. This large change, will eventually fade out and it will all become more stable, so this low rate of unemployment is not sustainable and we will see the unemployment rate increase.
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