Output and Jobs Statistics Don't Match

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.