Monday, December 7, 2009

Unemployment drops and rises simultaneously?

The New York Times reports:

In the best report since the recession began two years ago, only 11,000 jobs disappeared last month, the government said on Friday, and the unemployment rate actually dipped, to 10 percent, from 10.2 percent the previous month.

Amazing that the number of people working can be cut, but the overall ratio of working to non-working can decrease. Obviously, some creative math is involved -- people who have given up looking disappear from the tally.

Obviously, the same thing happens to some extent everywhere, but here are the latest figures for Germany:

The Federal Labor Office said the German unemployment rate narrowed by 0.1 percentage points from October to 7.6 percent. A total of 3.22 million people were out of work in November, down from 3.23 million in October.

Indeed, the German workforce seems to be weathering the crisis rather well; take a look at this chart - stable unemployment rates since 2008. In late 2008, Paul Krugman was vociferous about how Germany was not doing enough to help mitigate the financial crisis (which the US, not Germany, created), even calling the German government "boneheaded" (an unfair charge coming from the country that screwed everything up), but we now see that Krugman himself has changed his mind, though he does not admit he was wrong when he now writes:

Germany’s jobs miracle hasn’t received much attention in this country — but it’s real, it’s striking, and it raises serious questions about whether the U.S. government is doing the right things to fight unemployment.

Of course the US isn't doing the right thing to fight unemployment; otherwise, it wouldn't have doubled. The US economy jumps from one bubble to the next: subprime,, and remember the S&L? The Germans don't have magic policies, but rather relatively honest people trying to make a decent living. And a focus on technologies the world needs, like renewables. No BS real estate bubble here.

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