“Hooray! The Second Derivative of the Unemployment Rate Improved!”

Nate Silver,  statistician,  is ranked to be among the 100 most influential persons in the world by Times.

He has a blog at http://www.fivethirtyeight.com/ which is based very much on information search and statistics not only in U.S. but also in other countries. This is an example from U.S. with focus on the economic recession:538-nw


Hooray! The Second Derivative of the Unemployment Rate Improved!

by Nate Silver @ 12:12 PM

A lot of people are excited today not because the unemployment rate is low (it’s very high — 8.9 percent), nor because the economy is adding jobs (it lost another 539,000 last month, according to statistics just released by the BLS), but merely because it’s losing jobs less quickly. That is, the second derivative of the employment rate — the change in the rate of change — has improved. This is what the situation looks like:

The economy started losing jobs in January, 2008 and has continued to lose them ever since. The peak month for job losses — so far — was January 2009, in which 741,000 jobs were lost. The month at which the second derivative bottomed out — the time when the rate of job losses was increasing the fastest — came in November.

The $787 billion question, of course, is whether a decrease in the rate of job losses indeed portends a recovery, or whether such data is subject to false starts. Let’s take a somewhat high-level view of the progress of the employment situation over the previous five recessions.



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