How does the unemployment rate in may compare

Reference no: EM13199575

"A spike in the unemployment rate-the biggest in more than 2 decades-raised new concerns Friday that a weak labor outlook, high oil prices and continuing woes in the housing & credit markets are leading the US economyin to a painful recession. The gov. on Friday said that the unemployment rate soared to 5.5% in May from 5% in April- much higher than previously forcast. the surge marked the biggest one month jump in unemployment since Feb 1986, and the 5.5% rate is the highest level seen since Oct 2004. Unemployment is now a full percentage point higher than a year ago. CNN 6/6/08
A. How does the unemployment rate in May compare to the rate during hte past few recessions?
B. Why might the unemployment rate tend to actually underestimate the unemployment problem, especially during a recession?
C. How does the unemployment rate in May compare to the estimated natural unemployment rate? What does this imply about the relationship between the GDP and the potential GDP at this time?

Reference no: EM13199575

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