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Things That Make You Go Hmmm… (2)

February 9, 2014

From Business Insider’s "Chart of the Day" post on February 6.

business-insider-disability-welfare-food-stamps

The Stunning Rise Of Disability, Food Stamp And Welfare Benefits

In the wake of the financial crisis and great recession, the U.S. unemployment rate has tumbled precipitously from 10.0% to 6.7% in just four years.

“Only three other times in the past six decades has the unemployment rate fallen this far this fast: in the early 1950s, when growth averaged 6.7% per annum; in the late 1970s when GDP growth averaged 4.8%, and in the mid-1980s when growth averaged 5.2%,” said Gluskin Sheff’s David Rosenberg to the U.S. Senate Budget Committee.

“Today we accomplished this feat with only 2.4% growth which is disturbing because it means that it is not taking much in the way of incremental economic activity to drain valuable resources out of the labor market.”

Much of the decline in the unemployment rate has been due to the drop in the labor force participation rate (LFPR). And the drop in the LFPR has been due to a combination of aging demographics and an expanding group of discouraged workers walking away from the job market.

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