Shadow Economy Shows Joblessness Less Than Meets U.S. Eye – Bloomberg 03-19-13

Salient to Investors:

Bernard Baumohl at Economic Outlook Group said America’s shadow economy – estimated by economists to be $2 trillion – may explain why retail sales have grown at an annual rate of 3.5 percent or more since September 2010.

Over 30 percent of the unemployed have been out of work for half a year or more during every month since July 2009 versus below 30 percent in data going back to 1948.

Richard Cebula at Jacksonville University and Edgar L. Feige at the University of Wisconsin-Madison say as much as 18%-19% of total reportable income is not properly reported to the IRS, and the higher the unemployment rate, the greater the extent of aggregate federal income tax evasion. Richard Yamarone at Bloomberg said millions are involved.

Another indication is the surge in currency in circulation from $803 billion in 2007 to a record $1.18 trillion on March 13.

Read the full article at http://www.bloomberg.com/news/2013-03-20/shadow-economy-shows-joblessness-less-than-meets-u-s-eye.html

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