What Is the New Normal Unemployment Rate?


 

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.

What Is the New Normal Unemployment Rate?
Justin Weidner, John C. Williams
Mon, 14 Feb 2011 08:00:00 GMT

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