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 percent. The question of the "full employment rate" is debated widely among academics and policymakers. It wasn't until late 2000 that Fed chairman Alan Greenspan admitted to the lower unemployment rate as full employment - until recently, most policymakers still felt it was closer to 5 ½ percent. The "full employment unemployment rate" can change depending on the demographic structure of the labor force.

Short Term Perspective
The civilian unemployment rate edged down to 6 percent in October, and is now down 0.4 percentage points from its peak level of 6.4 percent reached in June. With robust economic activity, the jobless rate could head lower, although strong productivity gains are also preventing a sharp drop in the unemployment rate. Average hourly earnings rose 2.4 percent in October, less than last month. Wage hikes will likely remain subdued as long as labor market conditions are lackluster.

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

Pool of Available Labor   •   Nonfarm Productivity   •   Treasury Yields   •   Stock Prices   •   Fed Monetary Policy Summary