Unemployment Commentary

Topics: Unemployment, Inflation, Business cycle Pages: 2 (554 words) Published: August 26, 2008
Economics Commentary

U.S. Employers slashed jobs for the third straight month in March and unemployment rose to a nearly three-year high, offering the latest signs that the economy has fallen into a recession. The Labor Department's much anticipated report, released Friday the 4th of April, showed a net loss of 80,000 jobs last month. That marks the third straight month that jobs have fallen - the longest period of decline since early 2003. Now having acknowledged that the US is in a recession it is vital for the government to take appropriate measures to insure an Expansion which will help the economy out of an Depression and in direction of a Peak. This process is clearly defined in the business cycle as seen in fig.1.

In the case of the US, a recession leads into a Depression which has a lot of identifying characteristics; low income, low output, low demand low business confidence, low Investment, Deflation, Cyclical Unemployment, high Government spending and low import (export  Balance at Payment surplus). The characteristic which stands in this case is the unemployment. This is the state of an individual looking for a paying job but being able to find one. Unemployment does not include full-time students, the retired, children, or those not actively looking for a paying job (e.g.: full-time mothers). There are different kinds of unemployment and there are there different ways to measure unemployment.

Since the report is not very specific what causes the high unemployment other then the recession, we will have to suggest that we are dealing with cyclical unemployment, which concludes, to one solution, which is getting the country out of a depression and back into a boom. But like always this is easier said than done, for one always runs the runs different risks when executing these counter procedures. When trying to change the course of an economy especially one as big as the US the response given after policies have been applied,...
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