The United
States is on the cusp of full employment after recovering since The Great
Recession. According to 56% of the economists surveyed, the United States will
reach full employment within the first half of 2016. Close to a fifth of the
economists surveyed think that the U.S. has already reached full employment. Stephen Stanley, the chief economist of Amherst Pierpont
Securities, states that there is still a lot of people who felt they've been
left behind, but 5% unemployment is much better than the 10% we reached during
the recession. Another aspect to look at is wage growth. Usually, when
full employment is reached, wage growth is to follow, but this may not be
the case today. Michael Moran, the chief economist of Daiwa Capital Markets
America, says, "There's some lag between reaching a tight labor
market and wages going up." One reason for this is even because as the
unemployment rate has fallen, the labor force participation rate has also
declined. One demographic factor that can attribute to this is the aging population
retiring, and more young people getting higher education.
What do you guys
think about full employment and wages?
2 comments:
I think it is important to note that the term "full employment" signifies an economy in which cyclical economic weakness has diminished for the most part, and there is not pressure to raise inflation. The term does not indicate that all people have a job, and if they do it may be a very low-scale job. Furthermore, I agree with the fact that reaching "full employment" is an accomplishment and an improvement from the past, however it may sound more optimistic than it really is.
http://www.wsj.com/articles/economists-see-u-s-on-cusp-of-full-employment-wsj-survey-says-1444313041
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