Wednesday, February 24, 2010

"Jobless" recovery? What does that mean?

Unemployment rates are near all-time highs, few industries are creating new jobs, and job vacancies are scarce, yet some economists have announced the end of the Great Recession. Welcome to the jobless recovery.

A jobless person will typically define recovery as when he or she returns to work after a period of being involuntarily out of a job. An economist will typically define recovery as the return to growth in economic activity after a period of decline. The two views of recovery coincided following the recessions of the 1970s and 1980s. Following the recessions of 1990-1991 and 2001 however, unemployment rates continued to rise for about two years after the official end of the recessions.

The situation where economic activity resumes growth without a corresponding growth in employment is called a “jobless” recovery. Many analysts feel that the term describes our current situation. Since the term may be used often to describe the economy over the next year or two, it’s worth taking a closer look at this apparent economic oxymoron...

If you want to take that "closer" look, you can check out the full article, written by our Senior Research Analyst Nick Beleiciks.

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