Tuesday, July 22, 2014

The economy is shrinking, but more people are finding work

Justin Sullivan

Gross Domestic Product shrank at an annual 1 percent rate in the first quarter of the year and the alternative GDI measure of the same thing shrank even more rapidly.

Which makes it all the more puzzling that the news on the jobs front, thus far, seems fine. The Labor Department today announced that initial claims for Unemployment Insurance benefits have fallen to their lowest level since August 2007. And the jobs numbers from January, February, and March were okay.

Screen_shot_2014-05-02_at_8.46.28_am Those 569,000 net new jobs the economy added in the first quarter weren't runaway growth or anything, but it's a bit puzzling to see more people working in the context of less economic output.

As a mathematical matter, that means that productivity (i.e. output per worker) fell — fell by 1.7 percent to be precise. But qualitatively speaking it's a little difficult to see why that would be the case. What were all these new workers doing, in other words? These things happen. Vox hired a bunch of writers in March but didn't really start publishing until April. But I doubt we singlehandedly explain the trend.

Read This

X
Log In Sign Up

forgot?
Log In Sign Up

Forgot password?

We'll email you a reset link.

If you signed up using a 3rd party account like Facebook or Twitter, please login with it instead.

Forgot password?

Try another email?

Almost done,

By becoming a registered user, you are also agreeing to our Terms and confirming that you have read our Privacy Policy.
Spinner.vc97ec6e

Authenticating

Great!

Choose an available username to complete sign up.

In order to provide our users with a better overall experience, we ask for more information from Facebook when using it to login so that we can learn more about our audience and provide you with the best possible experience. We do not store specific user data and the sharing of it is not required to login with Facebook.