The unemployment report shows that two possible measures of cyclical unemployment increased in November.
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The mismatch between skills and jobs, or cyclical unemployment, has been floated as possible cause for sluggish job growth.
FORBES: The Return of the Strategic Hire: Unemployment Reaches 9.8%
As former Clinton Treasury official Brad DeLong said, "President Obama has a plan for dealing with our cyclical unemployment crisis, " but Romney does not.
As my colleague Ylan Mui reported earlier, this is partly why Boston Fed President Eric Rosengren worries that our cyclical unemployment problems could become structural and long-lasting.
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Even when most countries were enjoying the vast boom of the 00s, it was short term of cyclical unemployment that fell, not long term in any great noticeable manner.
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However, there is a danger that, when labour markets are gummed up, a cyclical rise in unemployment can turn into a structural one making it impervious to an economic upturn.
Admittedly, cyclical increases in unemployment may become permanent if labour-market rigidities, such as strict hiring-and-firing laws, make it hard for the jobless to find work even when the economy recovers, a condition known as hysteresis.
If most unemployment is cyclical, not structural, the Fed could theoretically help by stimulating demand with easier monetary policy.
Some of Europe's unemployment is cyclical, meaning that it could be cut by faster economic growth without sparking inflation.
Put that another way: Unemployment often hits cyclical lows in the months just before recession begins.
At first glance, this fall in unemployment could just be a cyclical dip.
These cost pressures suggest that the increase in unemployment is structural rather than cyclical, according to Ben Broadbent, an economist at Goldman Sachs.
This has pushed down the cost of cyclical spending (for instance, on unemployment) and allowed significant new handouts while keeping within the original plans.
When unemployment begins to ease, the cyclical negatives will let up on both Stryker segments.
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This suggests that unemployment is increasingly caused not by cyclical factors when workers are temporarily laid off as aggregate demand drops but by structural changes, when whole job categories and industries suffered permanent reversal.
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The basic policy conclusion of the rational expectations hypothesis is that counter-cyclical monetary and fiscal policies affect real GDP and unemployment only if they are unanticipated.
FORBES: Thomas Sargent, Rational Expectations And The Keynesian Consensus
While abiding by IMF-crafted pro-cyclical policies which included cutting spending, poverty and unemployment soared as the recession deepened. (Read Weakening Euro And Oil Stock Piles Drive Dollar Higher).
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The macroeconomy has a long-run equilibrium natural rate of unemployment and GDP from which unanticipated counter-cyclical policy can scarcely nudge the economy.
FORBES: Thomas Sargent, Rational Expectations And The Keynesian Consensus
"The fact that (overall unemployment) rose again despite indicators showing a cyclical recovery in Spain clouds the outlook for the economy and does not bode well for demand, " said Silvio Peruzzo, economist at Royal Bank of Scotland.
Rational expectations theory therefore implies that repeated counter-cyclical policies will be anticipated and are unlikely to affect real GDP or unemployment.
FORBES: Thomas Sargent, Rational Expectations And The Keynesian Consensus
For example, a person who accurately predicts that the unemployment rate is falling will be in a position to snag cyclical companies like Best Buy before other investors know that consumers may be more willing to spend money on discretionary items like TVs or iPads.
Another 2.7% is the cyclical deficit, which should disappear of its own accord as the economy recovers boosting tax revenues and reducing unemployment benefit payments.
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