Gross Domestic Product and unemployment are two economic indicators that are reported frequently and thought to be closely related. One attempts to measure everything that is produced in an economy and the other attempts to measure the amount of the labor force that is currently out of work. I have charted out the numbers for both figures since 1990. First, we will look at Gross Domestic Product.

Based on numbers from the Bureau of Economic Analysis (www.bea.gov) the trend is fairly apparent. Aside from an extended dip between 2008 and 2009, we have a fairly straight slide upward. If you look closely at the chart you will see a few quarters where there was little to no growth, but the overall trend quickly took over.

Unemployment, on the other hand, has been much more volatile.

Over the same period of time unemployment rates have spiked and fallen several times, and with more severe jumps in between. From this perspective, it doesn’t appear that the numbers are related at all. However, if take the GDP and unemployment rates’ percent change by quarter, a different picture emerges.

Looking at these charts, it seems to me, a relationship emerges. While neither seems to be a leading indicator of the other, it seems fairly apparent that they affect each other. While both statistics are vulnerable to manipulation by those that record them, it will be interesting to see if this pattern maintains as the current economic difficulties continue.

Carlton Smith is a Project Manager and Programmer living in Southeast Michigan. He is also the founder and Executive Editor of the web literary magazine Troubadour21.com. His blog can be found at UncleSol.net. Email Carlton at carlton@unclesol.net