It is possible for the unemployment rate at the beginning of a recession to be lower than the unemployment rate at the beginning of a recovery.

Question

Quizplus · Accepted Answer

This is because the unemployment rate is a lagging indicator, meaning it reflects changes in the economy after they have already occurred. Therefore, during a recession, people may exit the labor force altogether, which can temporarily lower the unemployment rate. Conversely, during a recovery, people may re-enter the labor force, which can increase the unemployment rate in the short-term.

It Is Possible for the Unemployment Rate at the Beginning