Quote:
Originally Posted by Boreas
Whether you think it a bit silly or not, when people who are looking for work find it and the rate at which they're finding it exceeds the rate at which new people enter the work force, we are approaching full employment. That's simply a fact and in no way carries the implication that full employment will be achieved or is even achievable.
John
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Using the definition used by economists for full employment, it is definitely attainable. ~6% unemployment used to be considered full employment (below which inflationary pressures would be too great). In our new reality, economists haven't settled on what unemployment rate constitutes full employment, but it's more in the range of 4% it seems.
We're at 5.5% now and it hasn't created wage inflation. That's part of what is making the Fed's policymakers' jobs difficult. At what unemployment rate will inflation become an issue and necessitate an interest rate hike? We ain't there yet, it seems.
http://www.investopedia.com/terms/f/fullemployment.asp