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Joined: 28 Dec 2005 Posts: 11986
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Posted: Sun Jul 26, 2015 9:00 am Post subject: Unemployment & Output Gap |
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PeakTrader:
The uptrend in employment to population, till around 2000, was partly driven by women entering the workforce.
Chart: https://research.stlouisfed.org/fred2/series/LNS11300002
The recovery from the deep recession has been so weak for so long that many people dropped-out of the labor force.
There may be many 20-somethings, who went to college, graduated, and are now living off their parent’s wealth collecting food stamps.
Also, there may be many 50-somethings, who were laid-off, collected unemployment for 99 weeks, couldn’t find a decent job, and now collect disability.
There may be more slack in the labor market than some data show.
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There are about 20 million more people receiving food stamps today compared to 2008, which suggests too much unemployment and underemployment.
http://www.cbpp.org/research/no-mystery-why-snap-enrollment-remains-high-its-still-the-economy?fa=view&id=3996
It seems, we’ll reach full employment when “SNAP participants as a share of the population” falls below 10%.
Currently, it’s around 14% and projected to fall to 10% in 2023.
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Long-term growth didn’t slow much, until 2008, even with rising oil prices and larger trade deficits in the 2000s.
Then the downshift, in growth, was sudden, severe, and, since 2009, sustained. Chart:
http://www.advisorperspectives.com/dshort/charts/indicators/GDP-per-capita-overview.html?GDP-per-capita-since-1960-with-regression.gif
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It was slowing, remaining above the trend line, but didn’t fall, till after the peak in December 2007.
It was a mild recession, till Lehman failed in September 2008.
The trough was in June 2009, although unemployment is a lagging indicator.
And, there was about twice as many new houses sold in the mid-2000s than the mid-1990s. Chart:
https://research.stlouisfed.org/fred2/series/HSN1F
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You should be interested in productivity at full employment.
There are too many idle inputs or hours. So, output is too low.
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