GDP rose but unemployment also rose indicating mixed data. One might wonder if employment elasticity has a factor in such growth with employment softness. A trend of high GDP and higher unemployment could indicate that wealth is being generated but where it goes and how it impacts the economy in the following months will be more telling. In other words, under this idea wealth is being generated but may not impacting the average American as much as would be beneficial. If employment rises next month then it could mean it was more or less just a dip along a typical economic trend line. If GDP continues to go up and unemployment rises that could be an indication of this elasticity but it could also be in part a factor of technological efficiencies and adaptations. One might say that as technology rises there is going to be at least some labor disruptions as jobs transition. The beautiful thing about the confounding variables of economics is that there are multiple explanations that might work but we have to look at many other factors to know that for sure. Let us wait and see what happens.....
GDP 3% increase Q2, 2024. BEA Q2 2024. Driven by spending. Business and equipment investments.
Unemployment rose to 4.3%. BLS July 2024 Unemployment
Productivity increases 2.3% in Q2 2024; unit labor costs increase 0.9% Second Quarter 2024
Technological Adaptation is Increasing McKinsey Technology Trends 2024
Unemployment is often a sign of a slowing economy but since COVID the economy has provided mixed indications making previous economic research just a little less accurate in prediction. New economic research is needed. As we move more of our economy online we are likely to see new theories and ideas come forward based on the nature by which the economy shifts to this digital transformation.
If someone comes and says, "I have another explanation!" and puts together some of the puzzle a different way you might say, "Great! I'm open to a better explanation." and that is how knowledge and critical thinking is created. Its not that any explanation is definitive but only through exploring them do we discover new things. Sometimes its just an exercise in understanding.
A study by Yale indicates that labor flow is negatively associated with growth. Labor Force Flow and Growth Study
Another study indicates that job growth and GDP growth are associated through employment elasticity. Study on Employment Elasticity
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