Although there isns't a free link to this, I'd urge people to subscribe to the Financial Times
and look at the April 26 story by Krishna Guha titled Output and jobs pose statistical mismatch
. It's an interesting examination of why output growth is apparently less than its potential and yet unemployment doesn't seem to go up, in violation of an economic rule called Okun's Law
. Seems that there are three explanations. One is that official counts of unemployment are below the actual (the article seems to find this unlikely because the count is done by a household survey, but that would still depend on how the answers are classified). Another is that the official counts of economic growth are low-balling the number. The third is that the ptoential for the economy is lower than people have been thinking. In any case, an interesting read.
Labels: economics, growth, Okun, U.S., unemployment