Few statistics are more debated than unemployment numbers. The former head of the Bureau of Labor Statistics (BLS), the agency publishing unemployment numbers, estimates the figures are probably 3% too low. The unemployment numbers are based on people actively looking for work. The first figure shows the percentage of labor force participation. Each horizontal line on this chart represents 2 million people. Since the official start of the 2008 recession, 6 million fewer people are labor participants. Four million fewer participate since the recession officially ended in mid-2009.
The European Central Bank is prepared to cut off funding to Cyprus and let the Mediterranean island succumb to financial meltdown if it has to, confident it has unlimited firepower to protect the rest of the eurozone.
Cyprus propelled the 17-nation bloc into uncharted waters on Tuesday by rejecting a proposed levy on bank deposits as a condition of a 10-billion euro (US$12.9-billion) EU bailout.
Without the aid, much of it to recapitalize Cypriot banks, the ECB says they will be insolvent, and it requires banks to be solvent for them to receive central bank support.
The new plan to bolster the troubled euro currency was announced Thursday at a meeting in Frankfurt. ECB president Mario Draghi is under immense pressure to prevent the collapse of the 16-nation eurozone. The bank did not lower interest rates, as some investors hoped, but did unveil steps to ease the zone's debt crisis.
AS A follow-up to this morning's post on Italy and the European Central Bank, I'd like to make a point about the use of communication by central banks. The Federal Reserve has been engaged in monetary easing for several years now, a process which has involved huge purchases of various kinds of assets.