It is reported that the economy grew by more than 3%

[theking]

...and it is reported that millions are without work. I don't understand how the economy can grow when multi millions of the work force is not working. Any economists here that can educate me.

[mmcfadden]

that's kinda funny to me... I was in a meeting with some people and the boss interrupted and said what you posted.

He was an owner of a lumber and truss supplier... I said great... did you read that housing will still decline for another 2 years. He said shit mmcfadden... get me outta this big pile of shit

[Arnox]

Originally Posted by theking

...and it is reported that millions are without work. I don't understand how the economy can grow when multi millions of the work force is not working. Any economists here that can educate me.

Economy goes to shit
People start hating the economy
Parts of economy get better
Twisted statistics and news reports make everything okay
People start to trust economy
Economy fixes itself

self-fulfilling prophecy, in short.

[kane]

Originally Posted by theking

...and it is reported that millions are without work. I don't understand how the economy can grow when multi millions of the work force is not working. Any economists here that can educate me.

The GDP is a basic measure of the economy as a whole and includes private consumption, gross investment and government spending. You can still have high unemployment and have the GDP grow in small amounts it mostly means that the government is spending money and those with jobs are spending money. The cash for clunkers program would be a good example of spending by consumers and the government.

That said I think the GDP can only grow so much with high unemployment. That will have to start turning around before it can really start to grow.

[kane]

Originally Posted by mmcfadden

that's kinda funny to me... I was in a meeting with some people and the boss interrupted and said what you posted.

He was an owner of a lumber and truss supplier... I said great... did you read that housing will still decline for another 2 years. He said shit mmcfadden... get me outta this big pile of shit

It could take a decade for housing to turn around. It was so overpriced that it still may not have fallen down to the point where it is actually in line with other expenses.

[Agent 488]

cash for clunkers and the stimulus checks drove this one dum dum.

[F-U-Jimmy]

Originally Posted by Arnox

Economy goes to shit
People start hating the economy
Parts of economy get better
Twisted statistics and news reports make everything okay
People start to trust economy
Economy fixes itself

self-fulfilling prophecy, in short.

In a way this is true Government puts out propaganda people believe the BS and start to spend again. Housing is up in CA because so many foreclosures are selling for 50cent on the $. Its all smoke and mirrors. What i see is millions out of work, jobs disappearing never to appear again and people who are frightened for their lives taking huge pay cuts just to stay in work. Its not limited to the USA Europe especially the UK is in one hell of a mess.

[notime]

Originally Posted by Arnox

Economy goes to shit
People start hating the economy
Parts of economy get better
Twisted statistics and news reports make everything okay
People start to trust economy
Economy fixes itself

self-fulfilling prophecy, in short.

Fear killed the economy so faith could save it (or improve it a little...baby steps are best!).
I think you are correct here.