The logic of 4.9%

As we wrote the other day, there are 140,000,000 or so people working in the United States, and the unemployment rate, at under 5%, is near its best performances for the post-Depression era, and quite a bit better than its average during that period. So it is quite likely, in areas where the infrastructure is complex and devastated, that evacuees will become residents of other cities and towns, and find jobs there. If that number is a couple of hundred thousand workers, it is hard to see how that would be significant to the economy at all, since often in the recent past, job creation has exceeeded 200,000 in a single month. The slowdown in the economy in the third and fourth quarters of 2005 should not make too much of a difference. Therefore, if you have a mental picture of people living in shelters in Texas or elsewhere, waiting for their houses to be rebuilt in New Orleans so that they can move back, find their old job, and resume their previous life, you should discard it. That will be a tiny percentage of what happens. (HT: DJ Drummond)

2 Responses to “The logic of 4.9%”

  1. David/California Says:

    Recall that more than one-quarter of the New Orleans population was government dependents – part of the “structural” unemployment economists refer to. Also, 70% of the city’s ecnomy was tourism. I don’t know how that equates to employment figures, but I would assume most of those employed in the city worked in tourism. Those skills – waiters, hotel workers, taxi drivers, travel agents, etc. – would seem readily transferable.

    I would expect the larger employment impact will come from Mississippi and Alabama, where skills may not be as transferrable, but the jobs created by reconstruction may mitigate this in the overall statistics.

  2. larwyn Says:

    Answers the question about “clubs you would like to join”
    The Red or The Blue?

    Click here: ABC News: Poll: Bush Not Taking Brunt of Katrina Criticism
    FEELINGS ABOUT THE HURRICANE RESPONSE
    ALL DEMS IND REPUB
    HOPEFULL 64 50 61 80
    Shocked 55 68 56 42
    ANGRY 45 63 51 27
    ASHAMED 44 63 46 28
    PROUD 27 17 21 43

    No wonder “Unemployment slumped to 4.9%” according to the Blue Stream
    Media.

    Appearing that my theory that as the Left also has control of “mental health
    and social service providers/professionals they cannot identify the needs of
    their fellow lefties. We must look manic to them, as you know, they are
    “mainstream”.

    No wonder they identify with the “freedom fighters” – have same self
    perception “ashamed” and “angry”.

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