Wednesday, January 15, 2014

(Related update): Once again, remind me, what economic recovery?

Related update:  A former student of mine informed me of a interesting article at the WSJ's feature section Real Time Economics a couple of days ago.  The gist of the article is that if we look at the country in terms of its constituent counties, half of the country has not recovered from the recession:
About half of the nation’s 3,069 county economies are still short of their prerecession economic output, reflecting the uneven economic recovery, according to a new report from the National Association of Counties.
There's also a cool interactive map that allows you to zoom in and look at specific counties.  You can find the article, here.  [ht: Matt McKinley].

Original post:  I've posted many times about the weakness of the so-called Obama Recovery.  His acolytes like to point to the declining unemployment rate as evidence that the economy is improving.  But as I've explained to my students every semester since the rate started "dropping", it's a deceptive statistic.  The fact is that after 99 weeks, those counted as unemployed are dropped out of the data set and are subsequently not counted as part of the unemployment figure even though they're still unemployed!  Thus, a much better measure of the employment condition of the economy is the percentage of the workforce employed.  Thus, using that metric, it's easy to see the deception of the common unemployment rate and to also see just how bad things are.  Here's what I'm talking about (click to enlarge):

Yep, a more accurate unemployment figure would be closer to 11%  and not the 6.8% or so that it is now. [ht:]