Sunday, February 5, 2017

Headline Unemployment Remains Low, bt Structural Problems Persist

The headline US unemployment rate has changed little over the past few months. In January, the rate moved up a tenth of a point to 4.8 percent, still well within the range that the Fed sees as consistent with its mandate to maintain maximum employment - the "Nairu," as economists call it.

The headline unemployment rate does not tell the whole story, however. One of the key features of the labor market during the Great Recession was the very strong rise in long-term unemployment, defined as workers who remain jobless, but continue to seek work, for 27 weeks or longer. As the next chart shows, the share of all unemployed who are out of work 27 weeks or longer remains much higher than was the case this far into previous expansions.  > > >

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