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Sunday, April 9, 2017

What to Watch on Jobs Day: The Fed should keep their foot off the brake and let the economy reach genuine full employment [feedly]

What to Watch on Jobs Day: The Fed should keep their foot off the brake and let the economy reach genuine full employment
http://www.epi.org/blog/what-to-watch-on-jobs-day-the-fed-should-keep-their-foot-off-the-brake-and-let-the-economy-reach-genuine-full-employment/

As we eagerly await the March employment numbers from the Bureau of Labor Statistics, I'm going to take a few minutes to set the context from the last month and reiterate why it's so important to let the economy get to full employment. Although President Trump claimed to have inherited a "mess" of an economy, the fact is that the economy has been slowly but steadily headed ever-closer to full employment for years. Simultaneously, the president has claimed he will enact policies that will see us add 25 million new jobs over the next 10 years. This pace of job growth over a decade is pretty much impossible to envision. But we could in theory see 2-3 years of significantly faster job growth than what has characterized the recent past. Unfortunately, no sign of this theoretical possibility has shown up in the data yet.

As shown in the figure below, payroll employment growth in February came in at 235,000. This is very much in line with what we saw in January (238,000) or in February of 2016 (237,000). While sustained growth at this level is welcome, it is hardly a break with very recent past trends and cannot be rightly attributed to any new policy. EPI's new autopilot economy tracker examines key labor market indicators to see where our performance going forward either diverges or doesn't diverge from the trends inherited from recent years. We track payroll employment growth along with the unemployment rate, prime-age employment-to-population ratio, and nominal wage growth.

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