Explanation of current economic slump

via FlowingData by Nathan Yau on 10/14/10

why it doesnt feel like a recovery

Neil Irwin and Alicia Parlapiano of The Washington Post report with this interactive graphic on why it doesn’t feel like we’re in a recovery:

The nation’s economic woes boil down to this. Compared with a healthy economy, about 7 million working-age people and 5 percent of the nation’s industrial capacity are sitting idle, not producing what they could. The economy is growing again, but at a rate — less than 2 percent in recent months — that’s too slow to keep up with a population that keeps increasing and workers who keep getting more efficient.

A step-by-step guide explains the output gap, the difference between potential and actual output.

[The Washington Post via @hfairfield]

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