There is a growing puzzle among central bankers, one that is both familiar and unique at the same time. When surveying the major employment figures, there doesn’t seem to be anything like recession in them, though that’s what we always see right before the contraction strikes. This time, however, there may be a legitimate reason beyond the customary trend-cycle assumptions of government statisticians.
During any business cycle, managers and owners are quite understandably reluctant to give up on masses of workers. Individuals, sure, yet largescale layoffs are unpalatable for any number of intuitive reasons beginning with what that would say about a firm’s prospects.
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