Sunday, August 01, 2010

Have jobs become a leading indicator?

Have jobs become a leading indicator?

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Employment typically lags the business cycle, but that doesn't have to be the case," said Karen Dynan, a former Federal Reserve economist now at the Brookings Institution. "The loss of momentum in labor markets in recent months was one of the signals that we weren't entering a self-sustaining recovery."

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Employment is classically a lagging indicator of improved economic activity. But it can also be a leading indicator of continued economic weakness and a W shaped recovery as this article posits.

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