Unemployment: The Next Big Thing to Watch Out for in 2023

As the economy continues to evolve, there are many different factors that can impact unemployment rates. Over the past couple of years, the focus has been on inflation and interest rates, but the next big topic for 2023 is unemployment. In this blog, we'll take a closer look at the multiple formulas used to calculate unemployment and the six key factors that are causing the economy to be unpredictable.

“Trillions of dollars pumped into the economy nearly 50 percent off everything we have in the currency-wise was fed into it in two and a half years we’ve never experienced that before.”

The current U3 unemployment rate is 3.5%, which is not dramatically different from the lowest rate of 2.9% in 1953. The U6 unemployment rate is 7.4%. The U.S. government has been tracking unemployment rates since the 1950s, and over the years there have been 11 recessions. Despite their efforts to control the markers and keep unemployment rates low, the current economy is an anomaly that economists cannot predict.

The six key factors causing this anomaly include:

1. A 128-month economic expansion caused by low interest rates of zero to 1%

2. The impact of the COVID-19 pandemic

3. Trillions of dollars pumped into the economy

4. Seven interest rate increases by the FED in 2022

5. Greatly increased wages for job positions

6. A large population movement, with people leaving cities like California and New York for other states

“Great resignation increase wages people were normally getting a job for 40 Grand new you have to pay them 65. we’re getting a job for a hundred thousand dollars you have to pay 150 000.”

These six factors happening at the same time over a 2- to 3-year period have created an unpredictable climate. In addition to these factors, there are four types of unemployment that need to be understood:

1. Frictional unemployment: occurs when people are transitioning from one job to another or moving from one state to another.

2. Structural unemployment: occurs when jobs are lost due to changes in technology or a shift to offshore hiring.

3. Cyclical unemployment: occurs during economic recessions.

4. Seasonal unemployment: occurs during specific times of the year, such as in agriculture or tourism industries.

It's important to understand these different factors and types of unemployment in order to have a better understanding of the economy and what may lie ahead. Despite the unpredictable nature of the economy, it's essential to protect ourselves and our personal information by using products like Aura. Try Aura free for two weeks to see if any of your or your family's personal information has been compromised.

“Population actually move like physically they moved a lot of people moved out of California first time since 1851 California’s population went down 330 000 people left New York to other places.”

In conclusion, unemployment will be a major topic of discussion in 2023, and understanding the different formulas and factors that impact it will be crucial in navigating the unpredictable economy.