Understanding Employment, Inflation And Gdp

The unemployment rate is divided into variables; such as employment level, unemployment level, labor force and stock variables. At a certain time in a recession they are measured in quantities. Due to a flow of variables such as natural populations, net immigrations, new entrances, and retirements there is change to the labor force.

The largest cause of unemployment can be attributed to recession. The term recession refers to the backward movement of the economy for a long period. People spend only when they have to. (Nagle 2009). With people spending less there would be less money in circulation therefore, enterprises would suffer financially and people would suffer too. This is so because recession reduces the fiscal bases of enterprises, forcing these enterprises to reduce their workforce through layoffs. These enterprises lay off their workers in order to cut the costs they incur in terms of wage and salary payments.

Beginning with unemployment in the 2007-2009 recession, U.S. unemployment rates peaked at 10% as well as held 41 consecutive months at rates higher than eight percent (Lazear 1). The U.S. economy plummeted during this time; many attributed the shift to a large decrease in the number of employed workers. To be able to better understand the unemployment issue, we must first examine the form of unemployment faced by the U.S. economy. Many believe that the changes faced by the U.S. labor market

The Depression was a gruesome time where people had worked relentlessly to survive. Unemployment today is as severe as it was in the 1930s, the unemployment rate of today is nowhere near the unemployment of the Great Depression. A pair of economists with the Federal Reserve Bank of Dallas created report called “A Historical Look at the Labor Market During Recessions”. The report is a graph of the WWII Recession, showing that the unemployment rate of a few years ago has past the unemployment rate of the WWII Recession. In 2008 the authors wrote the Unemployment Rate, it’s a report that describes the recessions of the past to the years of 2006 to 2011. The most of the recessions are above or near the average, but the highest recession is the Great Depression.

quarter of 2008. However, the number of unemployed persons increased at a much faster rate

According to the Bureau of Labor Statistics, the economic downturn beginning in December 2007 has resulted in a loss of 8.4 million jobs. In this same period, health care employment grew by 732,000.

-Many workers were laid off, and laid off workers did not have the money to spend (unemployment)

The recession was caused by the “dot-com” collapse which resulted in the bankruptcy of several large companies. The unemployment rate in October 2000 was 3.9% and that rate rose to 4.9% by August 2001 (Gail Makinen). Also, industrial production fell 3.5% from December 2000 to August 2001 (Gail Makinen). The economy actually improved in the second quarter by 2.7% (Kimberly Amadeo). Then, the economy fell again due to the attacks. 9/11 made the economy contract 1.1% in the third quarter of 2001 (Kimberly Amadeo). Unemployment continued to rise to 5.9% in mid-2002 and topped off at 6% in June 2003 (Kimberly Amadeo). The attacks of 9/11 extended the recession of 2001, as it lasted to

With the economy falling in shambles and companies defaulting on loans, nearly all private and corporate investment ceased. Companies couldn’t afford to expand, and in fact, many had to consolidate in order to cover the margins on their loans. This meant postponing hiring and laying workers off, which caused unemployment to skyrocket. With people now willing to work for less money, wages lessened too. At the same time prices rose in an attempt by companies to make some amount of profit off the goods.

While there are expectations of a yearly gain of nearly 2.3 million net new jobs, the unemployment rate is still very high i.e. around 6.5 percent. The lower-than-expected job growth is fueled by various factors including government hiring, weather, and Obamacare. Actually, similar to December, January had a lower-than expected increase in job opportunities since only 113,000 jobs were created. However, the rate of unemployment still reduced to 6.6 percent in this month despite of the growth in labor force. The current rate of unemployment is the lowest in U.S. since the 2008 recession because more people are leaving the labor force instead of finding jobs.

The United States is currently experiencing a slow recovery from the recession of 2008-09. The current unemployment rate is 7.7%, which is the lowest level since December of 2008 (BLS, 2012). However, this rate is believed to higher than the rate that would occur if the economy was operating at peak efficiency, and it is also believed that there are structural issues still underpinning this performance. For example, the number of Americans who have exited the work force as the result of prolonged unemployment is believed to be higher than usual. In addition, the Congressional Budget Office (CBO, 2012) notes that long-term unemployment of greater than 26 weeks is at a much higher rate than normal, which will have adverse long-run effects on the economy, since workers with long-term unemployment often find their career paths derailed.

The unemployment rate in the United States has improved dramatically over the last two years, from a high of 8.3% in July 2012, to a low of 6.6% in January 2014. In October of 2012, the civilian labor force increased from 578,000 to 155.6 million, labor force participation increased up to 63.8%, and total employment overall rose by 410,000! Since then, the unemployment rate has been falling at a stable rate due to a political push from Washington DC and new employment initiatives. The inflation rate over the last 2 years has been relatively stably, with a few major increases and decreases in 2012 and 2013. It reached a high of 2.3% in June of 2012, and reached a low of 1.0% at the end of 2013. The federal interest rate has remained at a constant .25% over the past few years.

The relationship between inflation and unemployment is a topic, which has been debated by economists for decades. It is this debate that has made the opinions about it evolve. In this essay, the controversial topic will be discussed by viewing different economists’ opinions on that according to time sequencing.

The fall of the economy at the end of our former president George W. Bush as led many of our citizen to be unemployed. It is the second highest rate that this country has seen since the 1980s. Our highest unemployment rate was in 1982 with a percent of 10.80 of our citizen been unemployed. The unemployment rate of our society today is at 9.60 percent leaving it 1.20 percent shy of 1982. According to the US labor report of August 2010, “The unemployment rate in the United States was last reported at 9.60 percent in August 2010. From 1948 until 2010 the United States’ Unemployment rate averaged 5.70 percent reaching an historical high of 10.80 percent in November of 1982 and a record low of 2.50 percent in May 1953” (CIOL, 20010). Since the Obama administration, I have seen some changes in our Unemployment. Companies are hiring more than they did two years ago. Therefore opening up new jobs for our citizen such as welding, construction, and banking.

Discuss the role of government policy in reducing unemployment and inflation. In your discussion make use of the diagrammatic representation of the macroeconomy developed in lectures in Term 2