Friday, February 5, 2010

Unemployment Rate Way Down

It dropped to 9.7% in January.

It’s not unusual for it to bounce around a bit, and we can’t guarantee that it won’t get worse again.

But, it’s also distinctly possible that we are seeing the first of several big drop that this rate will take as it falls off it’s peak value.

Remember in class I remarked that it wouldn’t be unusual for the unemployment rate to come down a third half-way towards the natural rate of unemployment (say to 7 or 8%) before the labor market tightens up, and the rate of decrease drops.

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