Normalizing Monetary Policy: Prospects and Perspectives

Although the recovery of the labor market from the deep recession following the financial crisis was frustratingly slow for quite a long time, progress has been more rapid of late. The unemployment rate has fallen markedly over the past few years and now stands at 5.5 percent, down from 10 percent at its peak. Payroll gains have averaged 275,000 per month over the past year, well above the pace needed to sustain further declines in the unemployment rate. Of course, we still have some way to go to reach our maximum employment goal. The unemployment rate has not yet declined to the 5.0 to 5.2 percent range that most FOMC participants now consider to be normal in the longer run. Involuntary part-time employment remains high by historical standards. Labor force participation is still somewhat lower than I would expect after accounting for demographic trends.1 And wage growth continues to be quite subdued. But I think we can all agree that the recovery in the labor market has been substantial.

Author: Board of Governors of the Federal Reserv

Publisher: Createspace Independent Publishing Platform

Publication Date: Apr 09, 2015

Number of Pages: 24 pages

Binding: Paperback or Softback

ISBN-10: 1511645369

ISBN-13: 9781511645362