In business cycle theory there are three categories of indicators. Leading, concurrent and lagging. Employment is a laggard.
Business cycle theory isn’t a theory. It is a field of empirical study begun by Wesley Mitchell in the late 1930’s and carried on to this day by the organization he started, NBER.
Mitchell used a group of economic measures to indicate the business cycle patterns. The best measure of the business cycle is total economic output, GDP. There are other measures such as manufacturing hours and personal income. These, altogether comprise the concurrent indicators. They indicate what is happening in the overall business cycle in the U.S..
Mitchell wanted to predict business cycles so he looked back at the statistical records and found roughly ten indexes that turned down before the concurrent indicators --- and turned up before the concurrent indicators. These are the leading indicators and they include the stock market, volume of shipping containers, new orders for capital goods, building permits and a few similar measures.
The way the business cycle works, first the leading indicators turn down, then the concurrent then the lagging indicators. Once the economy has started to grow, the leaders turn up, then the concurrent, then the lagging indicators start to rise. Unemployment is a lagging indicator meaning it rises after the economy is declining and unemployment doesn’t start to fall until after the economy is booming. Other lagging indicators are interest rates and inflation.
The whole point of this blog is: too bad for the Democrats who are cry babying about unemployment and outsourcing. The unemployment rate reached a peak last year and has been falling slowly since then. Since the economy is now booming, as measured by the concurrent indicators, it won’t be long before unemployment starts to fall rapidly and the number of new hires starts to grow dramatically. Its already happening and by July we will have a booming employment picture.