What is the new normal unemployment rate?

Justin Weidner and John Williams

FRBSF Economic Letter, 2011, issue feb14

Abstract: Recent labor markets developments, including mismatches in the skills of workers and jobs, extended unemployment benefits, and very high rates of long-term joblessness, may be impeding the return to \\"normal\\" unemployment rates of around 5%. An examination of alternative measures of labor market conditions suggests that the \\"normal\\" unemployment rate may have risen as much as 1.7 percentage points to about 6.7%, although much of this increase is likely to prove temporary. Even with such an increase, sizable labor market slack is expected to persist for years.

Keywords: economic conditions - United States; Unemployment; Labor market (search for similar items in EconPapers)
Date: 2011
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