Reuters: An economic puzzle Bernanke can't solve

link to Reuters

This should be a no-brainer for Economic Populist readers...

(Reuters) - It's a mystery that has puzzled even Federal Reserve Chairman Ben Bernanke: if the U.S. economy is growing rapidly, why isn't it creating jobs?


Perhaps we should send Bernanke the link to the site?

 Bernanke offered two possible explanations.

"One is that maybe the recession was deeper than we thought," he said in response to a question from a member of Congress last week. "The other is that the productivity gains were greater than we thought they would be when firms were able to cut their work forces and still maintain output."

 Sorry Ben, I think you should look here,here,and here



The economist, Jeremy Nalewaik, argued that a lesser known measure called gross domestic income may give a more accurate assessment of the business cycle. GDP looks at spending to measure the size of the economy, while GDI focuses on income.

Based on GDI, the economy began contracting in 2007, not 2008 as GDP data indicates. It also shows growth did not resume until the final quarter of 2009, while GDP showed the economy had expanded in the third quarter as well.

If GDI is indeed a more accurate gauge, there is reason to think employment will soon rise. Data released last Friday showed GDI jumped at a 6.2 percent annual rate in the fourth quarter, even faster than GDP's 5.6 percent pace.

That would also help explain why payrolls were still contracting eight months after GDP indicated economic growth resumed. Employment gains normally lags economic growth by a few months, so if the cycle turn came in October rather than June, it would make more sense to see job growth now.


 Are they grasping at straws?

Bob, why don't you just give him a call and explain it.

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well, we're screaming from the rooftops here

demanding they raw data aggregate on jobs created offshore, jobs lost offshore, citizenship status of workers (to capture BPO and other foreign labor arbitrage enterprises), and most importantly, the total foreign activities, including investments, hires, facilities by U.S. MNCs where the final sales are mainly in the United States.

I don't know, write Congress a letter saying we need global data metrics, real time data metrics and do not let MNCs and other vested interests bully you into stopping in getting some real damn data.

Oh Gee, they have no idea where the jobs went...just read any Indian newspaper how they are rejoicing on how it is raining jobs over there and those jobs are coming from....the United States. That's offshore outsourcing...and these cats cannot even mention the term.

We also clearly had an economic contraction.

The Fifth Option

How very bizarre! I remember Robert Reich proclaiming the exact same thing back in the '90s.

They must have these little red books they all read the same script from (those silly economists!!!!).

Duuuuh.....could it be that debt is figured in with the growth in the GDP, so that when extreme debt is created, that ostensible growth in the GDP is debt-driven???

Could it be that the vanishing American worker is always the Fifth Option: (1) offshoring, (2) foreign scab workers imported under many different visa programs (and through loopholes created in the Singapore Accords -- thanks Charlie Rangel, faux democrat!), (3) undocumented workers, (4) human trafficking (illegal or undocumented slave labor smuggled into the USA and paid - or not - slave wages), and finally (5) temp workers, who may, or may not, be US citizens.