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America's Unemployment Is Falling Already

Tim Worstall profile picture
Tim Worstall


  • This isn't perhaps what we were expecting and it's at least partially a conceit of the figures but it is true, unemployment is now falling.
  • We are still seeing huge numbers moving into unemployment - but larger numbers moving out of it.
  • Much, much, too soon to say it's all over but the wilder claims of imminent disaster are misplaced.

Our basic question here

We know the economy is bad right now - we've deliberately, by design, closed down large pieces of it, how could the situation be otherwise than bad? But that's not what we want to know. Rather, we're interested in two further things - how bad and how long?

That the economy even comes to a full halt isn't that bad a thing. It pretty much does so every Friday night and starts up again every Monday morning after all. This really is true enough that we have to be careful with month to month economic statistics, a month with an extra Sunday in it will vary them just for that reason alone. And of course, the economy does more than just stutter each holiday season, winter and summer.

The how long therefore matters, we know we can deal with a week or three of slowdown, and can deal with even a near-total halt for a few days.

On the other hand, losing 25% of the economy for 6 months would be a significant blow. More than anything else we'd expect not to be able to bounce back. That "human capital" that Kevin Hassett mentioned wouldn't survive unscathed for that period of time and so we'd all be less productive when we did return. If we're less productive the economy is smaller, we're poorer and the right level for the stock markets is lower - that last being what we're interested in here as investors.

So, how long and how deep?

Unemployment is falling

Sure, part of this is an artefact of the figures. This doesn't include all of the work being done to minimise jobs losses with government support and so on. It also doesn't include those - some 6 million at last count - who went unemployed and simply left the labor

This article was written by

Tim Worstall profile picture
Tim Worstall is a wholesaler of rare earth metals and one of the global experts in the metal scandium. He is also a Fellow at the Adam Smith Inst in London and an writer for a number of media outlets, including The Times (London), Telegraph, The Register and even, very occasionally indeed, for the WSJ. This account is linked with that of Mohamad Machine-Chian: https://seekingalpha.com/user/52914142/comments

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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