Ben and Me

You point out that in spite of troubles in the financial sector the unemployment rate is only 6.1%, which is pretty average. This strikes me as an odd way to estimate the impact of failures in finance on the broader economy.

If the finance sector is partially crippled, my understanding is that this would decrease employment primarily because businesses would have difficulty obtaining loans for good projects. Thus, it seems that the employment rate would be a lagging indicator of the impact of finance problems. Wouldn't it be better to look directly at how these troubles are affecting the availability and price of credit? Or am I missing something?