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Friday, September 04, 2009

The (Sluggish) Employment Report

I've been trying to figure out what to say about the employment news today that the economy lost "only" 216,000 jobs last month and that the unemployment rate ticked upward to 9.7%. While I don't have anything to add that hasn't been said already by someone, somewhere - see below - the main thing I want to do is to reinforce the message that employment is likely to lag output once the economy begins recovering, so we must continue programs that support the unemployed even after it's clear that output has turned the corner. If anything, we need to reinforce those programs, not reduce them. (Note: Contrary to the impression one might get from reading about recent economic developments, according to the data we have in hand the recovery has not started yet, i.e. we have not yet passed the trough of the output cycle let alone the employment cycle. What is happening is that the fall appears to be slowing substantially and we are poised to turn the corner, but that has not happened yet. And while expectations are high, there's no guarantee it will happen anytime soon, particularly if you strip out the effects of the stimulus package.)

Here's more: Paul Krugman, Spencer, Calculated Risk, Calculated Risk II, Brad DeLong, Real Time Economics, Andrew Leonard, Credit Writedowns, The Curious Capitalist, The Big Picture, Robert Reich.

    Posted by on Friday, September 4, 2009 at 12:01 PM in Economics, Fiscal Policy, Unemployment | Permalink  Comments (43)


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