Monday, December 30, 2013

Since 2007 GDP has increased by $800B and the number of total jobs has decreased by 2 million. How can that happen and "Where is the Money??""

The graph below is from HERE.

The percentage change in Real GDP from the 4th quarter of 2007 (when recession began) to the 3rd quarter of 2013 (the last reporting period) was 5.6%.  In dollar terms that is about $800 billion dollars (more or less).

The number of jobs in December of 2007 was 146,000,000.  Now it is about 144,000,000.  Two million jobs less than the high point in 2007.

So, we are producing roughly $800B MORE in dollar value of goods and services with 2M overall FEWER workers.  That is $400,000 more per one less worker ($800B/2Million) that is going, well, somewhere other than to hire new workers.  Machines? Software? Increased health costs? Profits? Profits? Did I mention Corporate profits?  See 2nd graph...

gdp

FRED Graph
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