Menu

Search

  |   Commentary

Menu

  |   Commentary

Search

US economy likely to reach full employment by late summer

The US labor market’s strong performance continues to be favorable for the consumer’s income and spending. Employment, in the past year, has grown 2.7 million (1.9%), with 93% of new jobs created in private service-providing industries. The jobless rate is a cycle low of 4.9% and there is no sign of weakening in the growth of employment from  the strong 200k+ average monthly pace that has existed in the past four years.

In the past three months, job growth has averaged 228k. Any remaining slack in the labor market is rapidly absorbed at this pace. Hence, assuming an approximate flat participation rate, the “breakeven” rate of payroll growth is expected to be 125k per month.

Recent figures imply that a rise in job availability has begun encouraging more marginally attached workers to come back into the labor force, supporting the view that labor force participation will rise moderately throughout the forecast horizon.

“We continue to expect the economy to reach full employment by late summer, consistent with a U-6 unemployment rate, which includes unemployed, discouraged job seekers and involuntary part-time workers, of 9%. The most recent reading was 9.7% in February”, says Nordea Bank.

Wage growth has started reviving as the economy fast approaches full employment. In February, average hourly earnings growth did slow to just 2.2% from 2.5% in January. However, other indicators also indicate that the labor market is near to full employment.

  • ET PRO
  • Market Data

Market-moving news and views, 24 hours a day >

May 24 19:00 UTC Released

USCattle Marketed

Actual

106.9 %

Forecast

106.6 %

Previous

97 %

May 24 19:00 UTC Released

USCattle Placed On Fd

Actual

108.7 %

Forecast

113 %

Previous

105 %

January 31 00:00 UTC 690904690904m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 690904690904m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 22 19:00 UTC 702724702724m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 690904690904m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 22 19:00 UTC 702724702724m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 690904690904m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 690904690904m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 690904690904m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

Close

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.