The COVID-19 pandemic has caused a sudden stop in an increasing number of countries. This in...
US Economy, unemployment: 7 days of Economics
In August, the US economy created 151,000 jobs, a touch below the average performance of the previous three months (190,000).
As this is more or less the figure thatallows stabilising the unemployment rate,while the labour participation ratio wasunchanged (62.8%), the rate ofunemployment remained below 5% (4.9%).This highlights a strong labour market. Still, whether the US is in full-employment or not remains an open question. Since last October, the unemployment rate fluctuates within the estimation range of the NAIRU (Non-Accelerating Inflation Rate of Unemployment, estimated between 4.6%and 5% by FOMC members). However,wages are still not on a sustained upwardstrend. For the core of US workers (non supervisory production employees of the private sector) average hourly earnings were up by 2.5% y/y in August, a stable rate since last December. This lacks of wage inflation is puzzling with such a low rate of unemployment rate. However, if instead ofthe U3-measure of unemployment, a broader measure is considered, the flatlining of wage growth makes perfect sense (see chart). The U6-measure (which adds marginally attached workers and those employed part-time for economic reasons to unemployed) remains almost two points above its pre-crisis low, meaning that there still is a large pool of available workers, which caps the increase in earnings.
US Labour Market
Read moreAll news
Against the backdrop of the unprecedented challenges to the world economy in 2020, Finance For...
The issue of invasive exotic species remains underestimated, even though they are known to be...