Question

Unemployment Rate                                      Civilian Labor Force Level

2008: 5.0                                                         2008: 145

2009: 7.8                                                        2009: -445

2010: 9.8                                                       2010: 373

2011: 9.1                                                        2011: -387

2012: 8.3                                                       2012: 386

2013: 8.0                                                     2013: 135        

2014: 6.6                                                     2014: 175

1) Make a graph with the dates along the horizontal axis and the unemployment rate on the vertical axis. Plot the data from the table on this graph. See if you can identify a peak, trough, recession, and/or expansion in that data.

2) Notice that the unemployment rate falls from Jan. 2010 to Jan 2011. Make an argument why the economy may not actually be recovering by referring to the labor force data from that same time period.

Answer 1

1)

Year	Unemployment rate
2008	5
2009	7.8
2010	9.8
2011	9.1
2012	8.3
2013	8
2014	6.6
Peak at 9.8% in 2010
No trough
recession during 2008 till 2010 when the unemployment rate was rising due to fall in output and low employment.
Expansion during 2010 to 2014 when the unemployment arte is falling.
2) Even though the unepmloyment are is falling this is on the pretext of fall in the civilian labor force and not due to expansion of output in the economy and that the reason why the economy may not be actually recovering is that the fall in unemployment is not transforming into high rates of employment.