US – The job market in one chart

When the Fed commenced rate hiking cycles in 1994, 1999 and 2004, the involuntary part time labor share was materially lower, while the prime age employment ratio was significantly higher.

To wit: the prime age employment ratio stood at 78.9%, 81.4% and 79.1% as each of the last three tightening cycles got underway.  In July the prime age employment ratio stood at 76.6% (up from a 74.8% cycle trough).

As a share of the  labor force, involuntary part-time employment stood at 3.6%, 2.4% and\ 3% respectively as each of the last  three tightening cycles commenced. In July, the involuntary part-time labor share is 4.8% (down from a 6% cycle peak).

Against the tapestry of low wage growth, persistently below target inflation and the asymmetric risks associated with the ZLB on short rates, Fed Chair Yellen’s cautious approach to recent labor market  improvements and eventual policy firming seems to make sense

Chosen excerpts by Job Market Monitor. Read the whole story at Here’s why the job market is telling the Yellen Fed to go slow, in one chart | AEIdeas.