Econoday | Resource Center | Fed Watching Indicators

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Short Term Perspective
The civilian unemployment rate edged up to 4.0 percent in November - but remains at levels last seen 30 years ago. At 4.0 percent, the yearly rise in average hourly earnings has posted its largest yearly gain in nearly two years. This could be a cause of concern for Fed officials who are worried about wage pressures.

Long Term Perspective
The civilian unemployment rate reflects the degree of tightness in the labor market. The unemployment rate generally associated with "full employment" -- the level that causes wage pressures to begin percolating -- is about 5 1/2 percent. Indeed, the chart shows that average hourly earnings did begin to accelerate when the jobless rate hit about 5 1/2 percent in 1995. Yet, even as the jobless rate hovered in the range of 4 to 4 1/2 percent in 1998-99, wage increases began to moderate. The debate is not yet settled as to the "true" full employment unemployment rate, but more economists and government policymakers are willing to concede it is below 5 percent.

Alternative Inflation Measures • Gold Prices • Employment Cost Index • Civilian Unemployment Rate

Pool of Available Labor • Nonfarm Productivity • Treasury Yields • Stock Prices • Humphrey-Hawkins Actions