Last Time Housing was at this Level Unemployment was 6%

October 17, 2012 Scott Sumner

Unemployment was 5.8% in July 2008 and 6.1% in August 2008.  Housing starts were 923,000 in July 2008 and 844,000 in August 2008.

Housing starts are now at 872,000.  And unemployment is 7.8%.  If you prefer other numbers like employment to population, or U-6, then things are much worse.

It’s not housing!  It’s NGDP, and it always has been.

With more NGDP we could be at 6% unemployment, even if we were just building 900,000 houses per month.

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About Scott Sumner 492 Articles

Affiliation: Bentley University

Scott Sumner has taught economics at Bentley University for the past 27 years.

He earned a BA in economics at Wisconsin and a PhD at University of Chicago.

Professor Sumner's current research topics include monetary policy targets and the Great Depression. His areas of interest are macroeconomics, monetary theory and policy, and history of economic thought.

Professor Sumner has published articles in the Journal of Political Economy, the Journal of Money, Credit and Banking, and the Bulletin of Economic Research.

Visit: TheMoneyIllusion

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