Wednesday, November 30, 2011

The "Going Nowhere" Economy

For the last year, the economy has been stuck in the mud.  We're growing, but not at a fast enough pace to lower unemployment.  Consider the following charts:


The Annualized GDP rate has been at or below 2.5% for the last 5 quarters.  Three quarters ago we were barely growing.  And while the last two quarters have seen some increases in the rate of growth, we're still below 2.5% -- in other words, barely growing.  As a result:


The unemployment rate -- while it's dropped a bit -- is still at very high levels.  Put another way


The unemployment rate has been stuck between 9.4% and 9.8% for the last 9 months.  And based on the 4-week moving average of initial unemployment clams:


We're not going to see a change anytime soon.

In other words, we're growing, but not enough to lower unemployment.