Posted on 08/12/2022 7:22:40 AM PDT by SeekAndFind
The economy has just seen two successive quarters of negative growth in Gross Domestic Product (GDP). That means we are in a recession. However, since the unemployment rate is at a full employment level and since the economy continues to add hundreds of thousands of new jobs each month, some economists say that we can’t be in a recession. Maybe, though, we are experiencing something new: a full-employment recession.
There is no doubt that the economy today is producing at rate that is about 2.5% less than the rate at year end 2021. In other words, we haven’t seen economic growth since the end of last year. But if the economy is shrinking, how can so many new jobs be added?
The answer is that we are experiencing something never seen before with economic activity. We are experiencing a full employment recession. This is a result of the severe labor shortage the economy has seen since mid-2020.
Some years ago, economist and NYU Professor Solomon Fabricant used the term “growth recession” to describe a condition where the economy is growing but the slow pace of growth is not sufficient to provide a job for all Americans who have just entered the labor force. As a result, unemployment increases even though the economy is growing.
Today we have a situation where the economy is shrinking yet there is a full employment level. Some of the current administration’s economists are saying we can’t be in a recession if we are at full employment.
The reason this is happening now, and it never happened before, is because of the severe labor shortage that has existed since the country started to recover from the government-induced recession in 2020.
(Excerpt) Read more at americanthinker.com ...
Now it is clear that the government overstimulated the economy. Nearly $3 trillion was saved by households who simply did not need to spend the money. Trillions more dollars were spent by these households, often to purchase goods that were in short supply. This led to the near double-digit inflation we are currently experiencing.
Many mostly lower-income workers chose not to return to their job when their employer called them back. These workers were living off the stimulus money they received, and they were not paying their rent or their student loans. Many liked this lifestyle and chose to stay out of the workforce, at least until the money runs out. The labor force participation rate fell. Employers had millions of open jobs that could not be filled.
Even today there are nearly 11 million job openings and less than 6 million unemployed workers. Because of this labor shortage, the unemployment rate will likely stay below 4%, which is generally considered a full employment level. The result is that we are in a full employment recession, where GDP is declining but the unemployment rate is not significantly increasing.
How many not in the workforce at all?
Still 5 Million fewer than in 2019.
Please…
My company has tightened its belt, and is engaging in all the activities of a downturn… though they have not officially announced any RIF’s yet….
They are not alone…
They know what’s coming…. Don’t kid yourself.
Where I live in southwest Colorado, the HELP WANTED signs are everywhere. Some businesses are cutting hours open, and some are cutting days open. How can that be considered “full employment”?
That’s what concerns me
I’m about to be looking for a new job, part time.
Yet another reason I started SSI early.
Hmmmm. So why are there so many job opening if we have nearly full employment? Oh, because folks that ain’t looking don’t get counted. I see. Good thing we’re brining in folks that will do jobs that Americans won’t do huh? We see help wanted signs everywhere in our locale. None below $15/hr that I’ve noticed.
Fewer jobs, fewer businesses, fewer job openings make the employment stats look better. But they are not in reality.
ADP payroll processing company has FAR more accurate numbers than ANYTHING Biden is putting out.
I have done accounting for over 65 years. I do NOT believe Biden’s numbers.
He is playing 3 card Monte with everything.
‘Full employment recession’??
This is what happens when you omit logic from your thinking
My company has tightened its belt, and is engaging in all the activities of a downturn… though they have not officially announced any RIF’s yet….
They are not alone…
They know what’s coming…. Don’t kid yourself.
You are correct. I am the Controller for a boat dealership. All of our suppliers/manufacturers are bracing for bad times ahead.
It’s not a full employment recession.
Work force participation has dropped significantly because people aren’t working. Sure, some actually ‘retired’ but what is really going on is that they have moved to ‘disabled’ after 2 years of unemployment.
Lets just face the reality that’s we are in an old fashioned recession with new labels and different way of counting ‘unemployed’.
You should go to work with the government or at least work for CNBC with that BS.
If you calculate unemployment honestly, we’ve been at depression levels for some time now. And knowing your posts for years, you damn well know that.
And workers of ALL skill levels and income witnessed the crumbling of all social contracts and attacks on personal sovereignty during the pandemic.
See, for a lot of people, when they take a JOB, they trade some sort of dream like being a writer or in a band or an actor, etc. They ditch the dream for the security of the paycheck. During the pandemic, many learned that there was no security. They were not ‘essential’, therefore nobody gave a damn what happened to them.
Going forward, many of those people have a lot of things to figure out about how to proceed. But once that trust is broken by the system, it isn’t coming back.
Even for those who are back at their jobs, any passion they once had has been sucked out of it. Some just don’t care. Some are ‘vacationing in place’ as long as they can con a paycheck. Some are actively working to undermine the bastards that screwed them over.
Welcome to the new world. It’s the same as the old one, but more people are wise to more of the BS.
You are my idol. I have been doing accounting for only 28 years. I am almost burned out. LOL!!! I am not worthy.
There is a 20-35 million US worker population out there that have zero motivation to work long term, occasionally journey into the unemployment rolls, taking an occasional seasonal job to reset their unemployment eligibility. The actual health status of 15 million of this group is so questionable if they are employable long term.
Yep and Biden has yet created one new job.
That may go towards explaining the "full employment" scenario, along with not including peoplr who have given up looking.
On a cynical note: employers may be getting what they asked for (in terms of be careful what you wish for) in terms of the last acceptable form of discrimination in the workplace-age. Well now a good chunk of those that have carried the water while this has been going on are able to leave, taking their tribal knowledge with them....I'm betting over the next decade we'll start hearing about productivity drops, while peter principle management continues to talk about how even more diversity/equity/inclusion and good esg scores are the way to success.
What, specifically, do the ADP numbers say please?
Biden re-invented STAGFLATION
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