Webpages useful for teachers of intermediate macroeconomics:

First Quarter Statistical Releases: Unemployment and Productivity...


Why did the unemployment rate jump to 6.0% in April? The big reason is the extension of unemployment benefits: whenever the government extends the duration of unemployment benefits from 26 to 39 weeks, even workers who see no prospect of finding a job in the near future will stay in the labor force to collect unemployment benefits. According to the BLS's household survey from which the unemployment rate is calculated, in April the number of employed rose by 82,000 and the number of those unemployed rose by 483,000--a 565,000 rise in the total labor force in a single month. Therefore expect the unemployment rate news over the next several months to be bad--but that has little to do with the strength and likely duration of the economic recovery.

Source: briefing.com

More important and more interesting is the tremendous surge in productivity in the first quarter of 2002. Productivity in the first quarter of 2002 was 2.1% higher than in the fourth quarter of 2002--productivity grew at an annual rate of 8.6%. Couple this with a -1.9% annual rate of change in hours worked (and a few adjustments in moving from the nonfarm business sector to the whole economy) and you get a GDP growth rate in the first quarter of 2002 of 6.5%. Over the past six months productivity has grown at an annual rate of 7.1% while hours worked have shrunk at an annual rate of 2.6%. Thus as far as employment is concerned, the economy is still in the downswing recession phase of the business cycle. But because -2.6 + 7.1 = 4.5, the 4.5% rate of real GDP growth over the past six months is nearly twice what we thought a decade ago that the trend rate of growth of the U.S. economy would be by now.

Source: briefing.com

Previous Handouts

2002-05-01: Industrial Production Release...
2002-04-24: Productivity Discrepancies
2002-04-17: The Course of the Recession and What It Tells Us About the New Economy
2002-04-10: Productivity Growth
2002-03-27: America's Rebound from Recession
2002-03-20: World Economic Forecasts
2002-03-13: Population Growth (Chapter 5: Growth Facts)
2002-03-06: Capacity Utilization (Chapter 2: Economic Data)
2002-02-27: U.S. Household Incomes (Chapter 2: Economic Data; Chapter 5: Growth Facts)
2002-02-20: Unemployment in the 1990s (Chapter 2: Economic Data)
2002-02-06: U.S. Monetary Policy (Chapter 13: Stabilization Policy)
2002-01-28: GDP in 2000 and 2001 (Chapter 13: Stabilization Policy. Chapter 2: Economic Data)
2002-01-21: The Course of the U.S. Recession (Chapter 13: Stabilization Policy)
2002-01-07: Argentina's Crisis (Chapter 15: Exchange Rate Regimes)
2001-12-10: The U.S. Recession (Chapter 2: Principal Macroeconomic Variables)
2001-12-03: The Overvalued Euro (Chapter 3: Exchange Rates; Chapter 15: Exchange Rate Regimes)
2001-11-26: Net Exports, the Exchange Rate, and an IS-Led Boom (Chapter 11: Balance of Payments; Chapter 15: Exchange Rate Regimes)
2001-11-19: The European Central Bank and Its Monetary Policy (Chapter 13: Stabilization Policy)
2001-11-12: Central Banks Worldwide Cut Interest Rates Again (Chapter 13: Stabilization Policy)
2001-11-05: Effects of the Collapse in Spending on Durables (Chapter 9: Income-Expenditure and the Multiplier.)
2001-10-28: What Kind of Stimulus (Chapter 13: Stabilization Policy. Chapter 9: Income-Expenditure and the Multiplier.)
2001-10-21: Federal Reserve Reaction to the Terror Attack on the World Trade Center (Chapter 13: Stabilization Policy. Chapter 10: The IS Curve.)
2001-10-14: Why a Stimulus Package Might Be Desireable (Chapter 13: Stabilization Policy. Chapter 10: The IS Curve.)

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