Table 5 Lifecycle of the Expansion
Description: • Table 5 plots the unemployment rate against average weekly hours in manufacturing on a quarterly basis since the beginning of 2020. • There are four phases: • In the initial phase of an expansion, unemployment is stable and remains high while there is a sharp rise in hours per week. • In the second phase, the unemployment rate falls while hours per week tend to be relatively stable.
• In the third phase, the unemployment rate is stable and hours per week decline. • A contraction occurs when unemployment rises and hours per week falls. Analysis:
• While unemployment rates have continued to linger between 3.5 to 4.0% since Q4 2022, average weekly hours have bounced back and forth between 40.1 and 40.3 hours per week since Q2 2022. These results indicate that the business cycle is in a holding pattern located in the third phase of the economic expansion.
Central Wisconsin Report - Spring 2023
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