The stockmarket seemed very happy with the United States’ gross domestic product figures out overnight but there is little joy in them for the country’s unemployed. The Nobel Prize-winning economist Paul Krugman put the 3.5% growth figure into a little perspective on his New York Times blog this morning when he pointed out that the growth rate was not remotely enough to make any real headway against the unemployment problem. He illustrated the past relationship between growth and unemployment with this little scatterplot:
Krugman commented that “basically, we’d be lucky if growth at this rate brought unemployment down by half a percentage point per year. At this rate, we wouldn’t reach anything that feels like full employment until well into the second Palin administration”.