The Economy Grows! What About Jobs?

GDP measures for the third quarter of this year have come in, and it's official: The economy grew 3.5 annualized percent, thanks in large part to the stimulus package, the first time it has increased over a quarter since a year ago. Also important: There was no sign of inflation, which should keep deficit hawks quiet. Well, it won't keep them quiet but it should convince policy-makers not to listen to them. Another good sign: exports grew 14.7 annualized percent over the same time period.

But, as readers will recall, GDP is at best an imperfect measure of economic growth, and for progressives the real indicator should be the unemployment rate, which reached a record 26-year high at the end of last month. We've discussed various policy measures that could be taken to relieve unemployment, from a jobs tax credit to "job sharing" to more fiscal aid to states. With concern for a jobless recovery rising as jobs continue to lag behind economic growth, the most worrisome fact is this: Economists still don't understand why we're looking at a jobless recovery, only that it appears more and more likely.

-- Tim Fernholz