Labor Market Slack and Monetary Policy

Transcription

1 EMBARGOED UNTIL WEDNESDAY, FEBRUARY, AT : P.M. OR UPON DELIVERY Labor Market Slack and Monetary Policy Eric S. Rosengren President & CEO Federal Reserve Bank of Boston February, The Boston Economic Club Boston, Massachusetts bostonfed.org

2 Figure : Civilian Unemployment Rate (U-): Total Unemployed, as a Percent of the Civilian Labor Force January 99 - January Percent 8 FOMC initiated.% threshold in December % Threshold

3 Figure : Civilian Unemployment Rate (U-) Path based on Okun s Law and Recent Trends Jan 99 - Jan Actual, Feb - Jan Projections 9 Percent Civilian Unemployment Rate (U-) Projection Using Okun's Law Trend Line Oct 9 - Jan April Full Employment Estimate -.% Note: Okun s Law projections assume growth of % above potential GDP growth of %. and author s calculations

4 Figure : Measures of Labor Underutilization January 99 - January 8 Percent U- Unemployment Rate Civilian Unemployment Rate (U-) 8 FOMC initiated.% threshold in December 99 8 (Vertical Bars).% Threshold Note: U- measure is total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.

5 Figure : Persons Employed Part Time for Economic Reasons January 99 - January Millions of Workers Percent of Civilian Labor Force

6 Figure : Persons Employed Part Time for Economic Reasons Because of Slack Work or Business Conditions January 99 - January Millions of Workers Percent of Civilian Labor Force

7 Figure : Persons Employed Part Time for Economic Reasons Because They Could Only Find Part-Time Work January 99 - January Millions of Workers Percent of Civilian Labor Force

8 Figure : Persons Employed Part Time for Economic Reasons for Selected Industries January - January. Millions of Workers... Wholesale and Retail Trade Leisure and Hospitality Education and Health Services Professional and Business Services Construction Manufacturing. 8 Note: Series are not seasonally adjusted. Selected industries are the industries with the largest numbers of workers part time for economic reasons in January.

9 Figure 8: Persons Employed Part Time for Economic Reasons: Age - January 99 - January Millions of Workers 99 Note: Series is not seasonally adjusted.

10 Figure 9: Persons Employed Part Time for Economic Reasons in Nonagricultural Industries by Race and Hispanic or Latino Ethnicity January - January 8 Millions of Workers White Hispanic or Latino Ethnicity Black or African American 8 Note: Series are not seasonally adjusted. The numbers add to more than the total as workers may be counted in more than one category.

11 Figure : Inflation Projections of Federal Reserve Governors and Bank Presidents for November, and December, Projections, December Actual. Percent Change, :Q - :Q *.. High, Low and Midpoint of Central Tendency for PCE Inflation Nov Projections for Dec Projections for Actual Note: Central tendency excludes the three highest and three lowest projections for each variable in each year. *The.% figure for is the percent change from December - December. Source: FOMC, Summary of Economic Projections

12 Figure : Employment Cost Indices for Civilian Workers 99:Q - :Q Percent Change from Year Earlier Total Compensation Wages & Salaries 99:Q :Q :Q :Q

13 Figure : Employment Cost Index for Total Compensation for Private Industry Workers by Occupational Group :Q - :Q Percent Change from Year Earlier Sales and Office Management and Professional Natural Resources, Construction and Maintenance Production, Transportation and Material Moving Service Occupations :Q :Q 9:Q :Q