Back in October 2010, job creation was at a complete standstill. The bottom of total employment was hit in February of that year and little had changed since. A simple analysis came through Barataria from Gary Shilling designed to predict when the turnaround might possibly occur – sometime after the economy (as Gross Domestic Product, GDP) started to grow at a rate of 3.3%.
Since that time, 2M jobs have been created in the economy and the headline unemployment rate has fallen to 8.5%. It feels like some improvement, if not much. Yet many people feel it can’t be a real decline in unemployment in part because the economy itself is not growing much (running an estimated 1.8% GDP growth in 2011).
Is there real job growth, or is the regression line from all the postwar data presented by Shilling telling us it can’t be real? My own analysis, which at the time pessimistically showed that higher growth might be necessary to grow jobs, may actually be telling us that job growth is indeed real – because it was so anemic over the previous decade of the Managed Depression, starting in 2000.
Barataria - The work of Erik Hare 