With jobless increase, economists hope correlation is not causation
Posted by: in Stocks Money NewsFiled under: Bad news, Economic data
Perhaps no nation expends more effort toward measuring its economy than the United States.
GDP, consumer prices, industrial production, housing starts, corporate earnings, retail sales, job creation…the financial world receives a continuing stream of information that helps Wall Street set the price for various asset classes, the chief among these being stocks and bonds.
Moreover, most of the key statistics are widely-known, long-standing indicators of economic activity. Others, however, are lesser-known — but often equally telling — barometers of the nation’s health. One of those involves unemployed workers.
The 13% threshold
The U.S. Labor Department announced that in December 2007, 7.66 million adults were unemployed, a 13.2% increase from December 2006, when 6.70 million adults were out of work.
The significance? In nine previous economic cycles since 1950 with a 13% rise, the annual rise in unemployed adults has signaled a recession every time, The New York Times reported.
Continue reading With jobless increase, economists hope correlation is not causation
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