News analysis
For most of these last 100 years, unemployment has been an obsession of both economists and government. This is because it has usually been a reliable marker in the business cycle. In good times, the rate falls and in bad times it rises.
This pattern has often led to a goofy conflation of cause and effect. Policy makers have imagined that if they can make everyone who wants a job to get one, the economic recovery happens on its own.
Put that way, the theory sounds as silly as it is but this ambition drove much of the economic policy of the 1930s, and it accounts for the long obsession with the topic in public life. For that reason, our own times are making a huge mess of all normal assumptions in macroeconomic forecasting. Looking at unemployment alone (3.6 percent), these seem like boom times. Instead, everyone is waiting now with bated breath for the recession to be declared official….