The Wall Street Journal surveys a group of 56 economists at various times during the year to ask for their opinions on various areas of the economy. In the lastest survey, the economists predicted that the unemployment rate would be 7.7 percent in November 2012.
The article points out:
"The early 1980s recovery moved at a much faster pace than the current upturn, especially in the job market. The 1984 election was held two years after unemployment hit its cyclical peak, and had already fallen by 3.6 percentage points. By contrast, the most recent peak in the jobless rate was at 10.1% in October 2009, and if economists are correct, that would mean a decline of just 2.4 percentage points in more than three years."
Ed Morrissey at Hot Air took a second look at the numbers yesterday. Mr. Morrissey points out:
"A few caveats are in order in this analysis. First, nothing here accounts for the civilian participation rate in the workforce, which has dropped to 64.2%, the lowest since 1982. If that stays the same, then 7.7% won't be as beneficial as it sounds, since it will mask a much higher drop in actual employment in relation to the population than the overall rate would indicate. During the last expansion, that number was up to 67.2% at its peak, which means that a significant number of people have dropped off the grid. And if they decided to start looking for jobs again, their return will spike the jobless number upward considerably even if the economy is producing a significant number of new jobs by then."
If the participation rate is not considered in the unemployment numbers, the numbers have no meaning. We need to keep that in mind as the numbers are announced.
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