During “the most wonderful time of the year,” when folks are packed like sardines into shopping malls across the country, an effect is seen on cyclical unemployment.
The demand for labor is increased, such that those crazy moms at the mall can receive all the help they need from plenty of store employees while they rummage through piles of tacky t-shirts, as those clueless employees say “OMG that would look so cute on your daughter, ma'am; why don’t you grab one for yourself while you’re at it?"
This demand for labor decreases unemployment for a period of time.
So, by and large, cyclical unemployment relates the unemployment rate to economic trends. When we have money to blow, chances are good that cyclical unemployment is pretty non-existent.
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Finance: What are Cyclical and Countercy...4 Views
Finance a la shmoop, what are cyclical and counter cyclical stocks? Okay so,
there's this thing called the business cycle and the stock market generally [The stock market going around the business cycle]
follows it. About every seven or eight years or so in the modern era the
business cycle booms and then for a year or two it busts, why? Well nobody really [The peaks are troughs of the cycle are shown]
knows but presidential cycles seem to have a lot to do with it when the
economy is bad the people vote with worry and elect politicians focused on [Guy smiling on stage]
you know helping them pay their mortgages. When the economy is good the
people tend to vote with guilt and they elect politicians who help them feel [The other politician now smiling on the stage]
less bad about doing well, something like that but when the cycle is good trending
up the future's so bright you have to wear shades kind of thing. [Girl putting on shades because of the bright light coming from a door labelled 'the future']
Well people then upgrade their washer dryers, they buy new cars rather than fix [Clothes going round in a washing machine]
their old ones, they travel far and wide on vacation, they treat themselves to a [Two deckchairs on a beach]
second maybe even a third scoop of ice cream. So a cyclical stock would be one
that sells any and or all of the above. That company will do very well when
things are going well, so shockingly a counter cyclical stock is from well the
opposite. Think drugs like legal ones like you'd have to be pretty poor to not [Tablet capsules falling and pills bouncing out]
buy that bottle of Viagra or aspirin when you have a you know headache... and
insurance are you really gonna cancel your policy in bad times, [Guy looking shocked]
maybe but boy it'd be one of the last things on your list.
Well how about cable TV and internet connectivity yeah most people would [Someone using a computer]
starve first. There's a basic cycle in business, it happens roughly every two
presidential elections so yeah don't fight the cycle not unless you're into [Guy getting ready to box against the business cycle]
some very weird type of martial arts...
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