May 01, 2014

Does a Downward Trending Rate of Unemployment Signal a Healthy Recovery?

David P. Frenzia

The national unemployment rate in the United States has generally been trending downward from a peak of 10 percent in October 2009 following the collapse of the financial sector in September 2008. Specifically, before the recession, which officially started in December 2007, the national unemployment rate in the United States had been at or below 5 percent for the previous 30 months. In September 2012, the national unemployment rate was 7.8 percent. According to the latest available data, the national unemployment rate is 7.2 percent, a decrease of 0.4 percent since June 2013. The question is whether this downward trend in unemployment is truly indicative that the economy is on the road to recovery.

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