The ObamØconomy

By Chrissy the Hyphenated

Chrissy’s Site Bites: http://news.webshots.com/photo/2260496430056011884sPVhBD

N.b., Economists consider an unemployment rate around 5% to be an indicator of a healthy economy. Because the unemployment rate includes people who are voluntarily unemployed — e.g., to go to school, raise children, or look for a better job — 5% indicates there are enough jobs for the people who want them and enough workers for employers to have a good choice among applicants.

6 Comments

Filed under Barack Obama, Economy, Unemployment

6 responses to “The ObamØconomy

  1. Ting

    How many young people do you know who are back in school now because they could not get a job? I know so many that I can’t even count them. We may have to rethink that 5%, because I would not classify many of the graduate students I know as “voluntary”. They just don’t know what else to do, so they are living off of student loans, studying, and hoping things will be different when they graduate – again. I sense a bubble here.

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    • chrissythehyphenated

      Re: 5%. I wasn’t citing current data about how many people are in school now. (I haven’t any idea what percent of the unemployed NOW are in school.) I was citing a general rule of thumb I’ve read about, that 5% is used as a general economic indicator of a healthy job market. I put that on there to give some perspective to just how bad 8%-10% is.

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      • Ting

        Yes, you are correct. When I was studying economics, back in the 70’s, when the first Arab oil embargo grabbed us all by the short hairs, 4 to 5% was considered “full employment.” If the unemployment rate got any lower, we learned, inflation would follow. There is a trade-off between unemployment and inflation, and the market searches for a balance. I just think that the balance point may have moved – I just don’t know where it will even out yet.

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        • chrissythehyphenated

          That’s an interesting point. I haven’t seen anyone else discuss it, but I’ll be watching now.

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          • I never studied economics in school, but when I was growing up, my father was the man in charge of hiring at the place where he worked. He always said that whenever unemployment dropped lower than about 5%, it became next to impossible for him to find people to hire. I took that to mean that there will always be a small percentage of the population that is just plain unemployable, for whatever reason.

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