August 12, 2022
Welcome to the full employment recession
By Michael Busler
The economy has just seen two successive quarters of negative growth in Gross Domestic Product (GDP). That means we are in a recession. However, since the unemployment rate is at a full employment level and since the economy continues to add hundreds of thousands of new jobs each month, some economists say that we can’t be in a recession. Maybe, though, we are experiencing something new: a full-employment recession.
There is no doubt that the economy today is producing at rate that is about 2.5% less than the rate at year end 2021. In other words, we haven’t seen economic growth since the end of last year. But if the economy is shrinking, how can so many new jobs be added?
The answer is that we are experiencing something never seen before with economic activity. We are experiencing a full employment recession. This is a result of the severe labor shortage the economy has seen since mid-2020.
Some years ago, economist and NYU Professor Solomon Fabricant used the term “growth recession” to describe a condition where the economy is growing but the slow pace of growth is not sufficient to provide a job for all Americans who have just entered the labor force. As a result, unemployment increases even though the economy is growing.
Today we have a situation where the economy is shrinking yet there is a full employment level. Some of the current administration’s economists are saying we can’t be in a recession if we are at full employment.
more
https://www.americanthinker.com/blog/2022/08/welcome_to_the_full_employment_recession.html
