US / The steady-state unemployment rate stands currently at 6.7 percent

The steady-state unemployment rate, or the rate of unemployment implied by the underlying labor force flows—the blue line in figure 2—stands currently at 6.7 percent. Our research shows that the actual unemployment rate converges toward this steady state. With a steady-state unemployment rate lower level than the actual rate (6.7 versus 7.2, a 0.5 percentage point difference), this “steady-state convergence dynamic” is pushing the unemployment rate down, implying a decline in unemployment going forward. Moreover, the model anticipates the steady-state unemployment rate (SSUR) to decline strongly (and much more than anticipated as of last month) over the coming month (figure 2). As a result, the gap between the unemployment rate and SSUR will remain roughly constant at about 0.5ppt over the next 6 months, and the steady-state convergence dynamic will remain strong, pushing the unemployment rate down over the next 6 months.

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via Good News On The Labor Market Front! Unemployment to Steadily Drop Over Next 6 Months | Brookings Institution.