Long Term Perspective
When the economy is operating at full throttle, a falling unemployment rate frightens policy-makers as they anticipate that rapidly rising wages will turn into runaway inflation. In fact, wage growth did begin to accelerate in 1995, and peaked in 1998. A rising jobless rate often alleviated wage pressures but is typically associated with economic recession. Federal Reserve policymakers aim for balanced growth with virtually no inflation.

Short Term Perspective
The unemployment rate edged down to 6 percent in October, and is down 0.4 percentage points from its peak of 6.4 percent reached in June. Hourly earnings moderated significantly in October.