In April 2019, the U.S. unemployment rate fell to 3.6 percent,its lowest level in almost 50 years. In Texas, the unemploymentrate was 3.4 percent in June 2019, its lowest level sinceindividual state data began being kept in 1976. Unemployment ratesthis low are often viewed as being very good for the economy, soexplain how low unemployment rates benefit the economy in terms ofthe following:
- productivity and GDP growth
- wages and wage growth
- consumer confidence
- labor supply & demand
- entitlement spending (make sure you understand the term“entitlement spending”)
Unemployment rates this low can also be viewed as beingdetrimental to the economy, so explain how low unemployment ratesmay also damage the economy in terms of the following:
- productivity and GDP growth
- employee loyalty
- potential inflation
- labor supply & demand
