U.S. Traditional unemployment rate is expected to fall to 4½% by end-2016

The U.S. traditional unemployment rate is close to the Fed's estimate of the NAIRU at 5%, in line with full employment. Spare capacity is seen in the labour market, with the broader U-6 underemployment measure at 9.9%, which includes discouraged job seekers and involuntary part-time workers.

"Still, at the recent pace of labour market improvements, if sustained, a U-6 underemployment rate of 9% -consistent with full employment according to our estimations - should be reached around mid-2016. The traditional unemployment rate is expected to fall to 4½% by end-2016 and 4¼% by end-2017" - Nordea Bank