Uncertainty and the slow labor market recovery

Sylvain Leduc and Zheng Liu

FRBSF Economic Letter, 2013, issue july22

Abstract: Since 2009, U.S. job vacancies have increased but unemployment has fallen more slowly than in past recoveries. There is evidence that heightened uncertainty about economic policy has been an important factor behind this change. Increased uncertainty may discourage businesses from filling vacancies, thereby raising unemployment. An estimate indicates that, without policy uncertainty, the unemployment rate in late 2012 would have been close to 6.5%, 1.3 percentage points lower than the actual rate.

Keywords: Economic policy; Labor market (search for similar items in EconPapers)
Date: 2013
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