It’s become conventional wisdom that the U.S. labor market has an awful lot of embedded slack. Wage growth remains anemic, and millions of Americans are still looking for work, fully six years after the last recession ended. #-ad_banner-#But the conventional wisdom is wrong. For employees with the right set of skills (and typically a college degree), we have already reached what economists call “full employment.” That was the message that Stanley Fischer, the Vice Chairman of the Federal Reserve, noted in a round of interviews with Bloomberg News, The Wall Street Journal, and others in early August. … Read More
It’s become conventional wisdom that the U.S. labor market has an awful lot of embedded slack. Wage growth remains anemic, and millions of Americans are still looking for work, fully six years after the last recession ended. #-ad_banner-#But the conventional wisdom is wrong. For employees with the right set of skills (and typically a college degree), we have already reached what economists call “full employment.” That was the message that Stanley Fischer, the Vice Chairman of the Federal Reserve, noted in a round of interviews with Bloomberg News, The Wall Street Journal, and others in early August. Indeed the job market is far tighter than many might think. The Federal Reserve has found that over long periods, roughly 2.0% of college grads are without work, on average, at any given time. By their measure, that figure is closer to 1.0% right now, indicating a current adjusted unemployment rate in negative territory. Here’s the remarkable thing about the current employment picture: The construction industry, which is heavily dependent on the housing sector, remains weak, but is finally getting stronger as housing starts begin to build steam. Housing starts have been very strong recently, hitting… Read More