Markus Stocker bio photo

Markus Stocker

Between information technology and environmental science with a flair for economics, the clarinet, and the world of soups and salads.

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If you follow unemployment figures you must have noticed the decline in US underemployment of the past few weeks. According to Gallup, on November 5 US underemployment was at 18.2%. Since then it is falling, and today underemployment is at 17.4%. That’s quite a drop, especially if you compare it with the trend over the past two years.

What happened recently? Well, among other things, there were the G-20 and APEC summits, the US Federal Reserve’s decision for a second round of quantitative easing, and the US elections, on November 2, which turned some maps red, following the Democrat’s losses.

Gallup’s chief economist Dennis Jacobe suggests one possible interpretation on how the changed US political landscape may be affecting US underemployment. I quote,

Of course, I also think the mid-term elections may have played a role in changing perceptions. It seemed clear the Republicans were going to take over the House in early October. As a result, many major corporations could see that Americans were moving toward a politically divided government, which companies might perceive as posing less legislative and regulatory risk. With a divided government, there’s less chance that Congress will pass aggressive actions in any area. (Emphasis added.)

Are things going to improve thanks to a divided, and paralyzed, government?