Thursday, 11 July 2013

The bad news in one chart [updated]

So you’ve been hearing news that the American economy has recovered.

You’ve heard that things are on the way up.

What you’ve been hearing however is bollocks.

Here’s the bad news in one chart—after shedding jobs at a rapid rate during the onset of the depression recession, the percentage of Americans in work has got no better.  Only 58.7% of the civilian adult population of 245 million was working last month, and only 47% of Americans had a full-time job

There is no depression in America?

Get this. Housing was the majority of "real" GDP growth,* and housing growth was simply the result of the Federal Reserve suppressing the interest rate .
This reveals another flaw in GDP (besides the obvious one that government spending adds to GDP).

* “Housing activity was the sole positive contributor to economic growth in the second quarter of 2012, and it comprised over two thirds of real GDP growth in the first quarter of 2013. First quarter “real” GDP growth was only 1.8 percent, 69 percent of which was directly attributable to housing.” – Tyler Durden, Zero Hedge


  1. Sure but look at the longer term time series.

    Big big hike in labor force participation from mid-80s through 2000, dip down, hike up again, now back to where things were in the early 80s. Not saying it's good or anything, but it's not nuts to think that labour force participation rates experienced in the 90s-2000s was highly anomalous. And more folks now hitting retirement age than were in the 80s and 90s too....

  2. The general rise in labour force participation is because women joined the workforce.

  3. Although interestingly, men have been leaving it:

  4. Yup. I'd be most interested in seeing a series on "percentage employed, among those aged 25-55", sorted by gender. Knocks out retirement effect. I'd also wonder whether the near unemployability of ex-felons is starting to bite in some subgroups.


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