“The buoyant monthly employment gains that accompanied prior recoveries are not likely to be repeated. Indeed, even if GDP growth were to surprise on the high side (3.1 percent for 2013 as illustrated in the cyclical LFPR scenario), employment growth generated by our model would still be just 147,000 per month in the current year, even though the economy would be on a path to a 6.5 percent unemployment rate by the third quarter of 2014” write Mark E. Schweitzer and Murat Tasci.
“Ultimately, the degree of change in employment growth or the unemployment rate required to represent a “substantial” amount of progress in the labor market outlook is a subjective judgment. However, the pattern of employment growth that the economy will generate over a multiyear span depends importantly on output growth, the trend paths of labor market dynamism, and labor force participation. In this Commentary we used a simple model of labor markets to demonstrate why it is reasonable to think that the monthly pace of employment gains is likely to be smaller than the U.S. has seen in past recoveries.”
Chosen excerpts by Job Market Monitor
via What Constitutes Substantial Employment Gains in Today’s Labor Market? | The Big Picture.
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