Another Indication Full Employment Only Applies to Limited Circumstances if at All

by Jeffrey P. Snider
Alhambra Partners

When the unemployment rate tumbled toward 5% and now below it, economists thought that was overheating. For monetary policy, that was much of the basis for adjusting Fed communication (not rate hikes, as credit and funding markets are doing the opposite). Despite the “best jobs market in decades”, however, confirmation of that robust labor agenda is scarce at best and really non-existent.

For instance, the last time the unemployment rate was at or near “full employment” below 5% was 2007 just prior to the Great Recession. That year there were an average of 26.3 million Americans receiving Supplemental Nutrition benefits, or SNAP.

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