MacroPolicy Perspectives
MacroPolicy Perspectives LLC

Links from MPP

Links from MPP

Are We at Full Employment?

The conclusion that the economy is at or close to full employment is central to the Fed’s decision to accelerate the pace of interest rate hikes and monetary tightening this year. But full employment lacks a clear-cut definition, and the severity of the Great Recession has left difficult to assess pockets of labor market slack in the form of a shadow labor force of unknown size. In a competitive labor market like the US enjoys, wage growth is the price that clears the market, and continued low wage growth suggests there may be more healing that can be accomplished before the labor market has reached its cyclical potential.


Coronado Julia
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