Saturday, April 17, 2010

Unexpected unemployment chart of the day

Tax cuts, not one shot rebates, have been proven to stimulate the economy because they enable businesses to plan for the future, knowing what the costs will be. In this climate, there is great uncertainty about the direction of taxes and regulation, and this is preventing expansion. It is obvious from this graph that the stimulus and bailouts have not worked. (Click on the graph to make it larger.)

For the past 5 1/2 months, the initial unemployment claims data have not really changed. Here’s what I mean:

The data are oscillating about a slowly increasing value, indicating that, if anything, unemployment claims are increasing. That means that for the past 5 1/2 months, every time the administration has told us that the unemployment situation is slowly recovering, and that the data show “the right trend,” they have been absolutely mistaken.

The media has been doing their typical baby duck analysis: every day is a brand new day, every unemployment claims report is the first one they’ve ever seen. So we get headlines like, “job situation improving” when the number of claims drops, and “unexpected increase” when the number rises
For half a year the claims data has just been oscillating – going nowhere. And nobody seems to have noticed.

Read original article here.

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