Friday, February 1, 2013

Unemployment Rate nudges back up to 7.9 percent

by Clifford F. Thies

The just released labor market report show that the unemployment rate nudged back up to 7.9 percent, with job creation again falling short of what would be needed to actually reduce the unemployment rate, and with even more Americans dropping out of the labor force. Earlier in the week, the first estimate of the 4th Quarter GDP showed decline, albeit a very small decline. Together with other indicators, such as surveys of consumer confidence, these data suggest that what had been a disappointing recovery may have transitioned into a standstill.

As to whether this standstill is merely one of those "soft spots," as Alan Greenspan once described them, or the start of an actual downturn is a valid question; the answer to which is suggested by the last week's release of the Conference Board's leading indicators, to be the former.

1 comment:

John Morris said...

At these extremely low "growth rates" tiny variations in the assumed inflation rate make a huge difference.

"Interestingly enough, the consensus forecast was for the deflator to come in at 1.6%. Had the deflator indeed come in at the consensus of 1.6%, Real GDP would have been a percent lower at -1.13%. Had the deflator indeed remained unchanged from the previous quarter, today's Q4 real GDP would be two percent lower at -2.21%"