Question

As our economy is moving along, unemployment has fallen to the low end, and sometimes less, of the natural rate (4-6%) and inflation is currently low, until the pandemic. How accurate is the current unemployment number and should we look at the labor force participation rate as a barometer for economic health? What industry sectors are experiencing higher unemployment? How long before things return to normal? Debate on the issue of the statistic from the aspect of what you, as a consumer, see in the economy. Please include one outside academic style source beyond the text to support your argument. (Do not define the types of unemployment) **300 WORD MINIMUM**

Answer 1

Being unemployment and inflation at low levels could be considered a yardstick of growing economy. But, in the current scenarios these are low because of the pandemic. There aren't growing job opportunities rather it's a forced unemployment wherein the bigger chunk of burden for society cost is borne by government. The demand for non-essential products is out completely. Factories and other establishments are asked to shut their businesses for few months.

On the contrary, there is cost bubble which is controlled by government and this is not getting passed to the general public, yes, of course, due to humanity. But, if the people are asked strictly to be home-bound , which would be including labour working in these factories producing essential commodities, like Food, Milk, Gas stations etc, would eventually increase the cost of these products till pandemic gets over. This would essentially lead to inflation, no doubt government can intervene by putting a cap on pricing but that could be done only by giving subsidy to these sectors to make up for remaining cost, most likely some might start doing hoarding and black marketing, as fair competiton between the market players will be totally out.

Labor force participation rate cannot be treated as a barometer for economic health currently, because the prime important aspect is the security of people. Lives of the people need to be saved for generations to be served. If government miss it's sole target, I don't think it will ever be able to justify it's people after the pandemic gets over that monetary value, stronger economy, Low inflation etc was something it was working on in crisis situation.Life is precious and cannot be compensated with anything.