Unemployment is what they call a “lagging indicator,” meaning that when an economy pulls out of a recession you can expect unemployment to grow or stay flat some time after GDP begins growing. In a sense, though, this is an arbitrary choice of terms. We could define recessions in labor market terms and think of GDP as a leading indicator. But I think that if you want to understand elite conceptions of the economy you need to process Richard Florida’s point about education and unemployment:
Unemployment is even more uneven by education or human capital level. The unemployment rate for college graduates is 4.8 percent, half that for high school (only) graduates (10 percent), and one-third of the 15.5 percent rate facing those without a high school diploma.
Now of course even for college graduates the labor market right now is relatively bad compared to how things have looked in the past. But the point is that even a very bad labor market doesn’t lead to especially high unemployment rates among the college educated. But the college educated are relatively likely to have investments in the stock market—retirement plans, savings for the kids to go to college, etc.
So for the college educated, what we’ve seen over the past three months—slower deterioration of labor market conditions and a turnaround in stock prices—really does count as substantial improvement. And of course it’s college educated people writing your newspaper articles, writing your tv news copy, staffing your members of congress, etc. And there’s a good deal of social stratification along these kind of class lines. College educated people tend to have college educated families (not me, though, neither my dad nor my brother has a bachelor’s degree) and college educated friends. The whole situation can create an intense solipsism about conditions facing the BA-less majority of the country.