US GDP: Economy Growing Faster Than Thought

[QUOTE="chessmaster1989"]

[QUOTE="KC_Hokie"]I don't think you're comprehending what I'm saying. There is a direct correlation between GDP increase % and unemployment.

And just to maintain the current employment rate it's been shown you need 2-2.25% GDP growth.

It's not that complicated.

KC_Hokie

Goddamit Hokie

You're talking long-run

I'm talking short-run

THEY'RE DIFFERENT

GODDAMIT HOKIE

Look here's a graph, you're right about the long run trend, but you can point to a number of years where there was 2+% growth and unemployment rose (and this is at an even more aggregated level than with quarters). LONG RUN TRENDS DO NOT NECESSARILY APPLY IN THE SHORT RUN. That's why it's called a trend.

[QUOTE="chessmaster1989"]

[QUOTE="KC_Hokie"]I don't think you're comprehending what I'm saying. There is a direct correlation between GDP increase % and unemployment.

And just to maintain the current employment rate it's been shown you need 2-2.25% GDP growth.

It's not that complicated.

KC_Hokie

Goddamit Hokie

You're talking long-run

I'm talking short-run

THEY'RE DIFFERENT

No, just no.

As shown in the figure above, the relationship between private-sector job growth and GDP growth on a quarterly basis has been surprisingly weak over the course of the first two years of the past three economic recoveries (and surprisingly weak is an understatement as the correlation between the two series is almost 0)

Why is there such a weak relationship between GDP and jobs? The main reason is simply that quarterly changes in employment and GDP are volatile. Short-term numbers have a way of moving up and down a lot. Thats why economists emphasize longer-term averages that smooth out this volatility.

Mark Doms, Chief Economist, U.S. Department of Commerce,April 26, 2011

[QUOTE="Audacitron"]

[QUOTE="KC_Hokie"]That's still awful. Not even high enough to keep up with population increase. KC_Hokie

How do you figure that? Population growth rate is under 1%.

Again, how do you figure? Where did you pluck that 2.25% figure from?

GDP doesn't automatically translate into employment statistics. It just means that as a whole, we're making more money than last year. More money is changing hands.

In theory if we're making more money we should be able to hire more people, but if the bulk of the money is just going to the richest 1%, and they're putting that money in the stock market rather than the jobs market, all that growth isn't going to translate into something that effects people's day to day lives.

[QUOTE="KC_Hokie"][QUOTE="chessmaster1989"]

Goddamit Hokie

You're talking long-run

I'm talking short-run

THEY'RE DIFFERENT

SUD123456

GODDAMIT HOKIE

Look here's a graph, you're right about the long run trend, but you can point to a number of years where there was 2+% growth and unemployment rose (and this is at an even more aggregated level than with quarters). LONG RUN TRENDS DO NOT NECESSARILY APPLY IN THE SHORT RUN. That's why it's called a trend.

The short term and long term trends for the U.S. economy are both bad.

[QUOTE="SUD123456"]

[QUOTE="KC_Hokie"]The formula applies to both long term and short term. Just add up the quarters to get a year. KC_Hokie

GODDAMIT HOKIE

Look here's a graph, you're right about the long run trend, but you can point to a number of years where there was 2+% growth and unemployment rose (and this is at an even more aggregated level than with quarters). LONG RUN TRENDS DO NOT NECESSARILY APPLY IN THE SHORT RUN. That's why it's called a trend.

The short term and long term trends for the U.S. economy are both bad.

I know you didn't make it up. All I'm saying is that it's not meant to be applied on a quarter-by-quarter basis. That is, a quarter with 2% growth and no change to unemployment is no more a confirmation of it than a year (per the graph above) with 4% growth and 2% rise in unemployment is a contradiction of it.

[QUOTE="KC_Hokie"]

[QUOTE="Audacitron"]

How do you figure that? Population growth rate is under 1%.

Audacitron

Again, how do you figure? Where did you pluck that 2.25% figure from?

GDP doesn't automatically translate into employment statistics. It just means that as a whole, we're making more money than last year. More money is changing hands.

In theory if we're making more money we should be able to hire more people, but if the bulk of the money is just going to the richest 1%, and they're putting that money in the stock market rather than the jobs market, all that growth isn't going to translate into something that effects people's day to day lives.

[QUOTE="KC_Hokie"]

[QUOTE="SUD123456"]

GODDAMIT HOKIE

Look here's a graph, you're right about the long run trend, but you can point to a number of years where there was 2+% growth and unemployment rose (and this is at an even more aggregated level than with quarters). LONG RUN TRENDS DO NOT NECESSARILY APPLY IN THE SHORT RUN. That's why it's called a trend.

chessmaster1989

The short term and long term trends for the U.S. economy are both bad.

I know you didn't make it up. All I'm saying is that it's not meant to be applied on a quarter-by-quarter basis. That is, a quarter with 2% growth and no change to unemployment is no more a confirmation of it than a year (per the graph above) with 4% growth and 2% rise in unemployment is a contradiction of it.

In theory if we're making more money we should be able to hire more people, but if the bulk of the money is just going to the richest 1%, and they're putting that money in the stock market rather than the jobs market, all that growth isn't going to translate into something that effects people's day to day lives.

Audacitron