What Causes Unemployment to Rise or Fall
By Allen Krewzz
Demand for Goods and Services Comes First
How Interest Rates Ripple Into Hiring Decisions
Technology, Automation, and Shifting Skill Demand
Confidence Shocks and Sudden Downturns
Economists sometimes describe this as a self-reinforcing cycle: falling confidence reduces spending, which reduces business activity, which then justifies the original drop in confidence.