Slight Slack

unemploymentSubtracting November’s excellent unemployment rate of 4.6%, (tops since 8/07) from the November U6 rate of 9.3%, the most expansive measure of unemployment and underemployment (and the best since 4/08), is a quick way to measure labor force slack. That number is 4.7%. At the housing boom peak in 4/06 it was 3.4%. At 4.7%, there’s tops another 1.5 million people who want to work more; not much more slack.

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  1. Brad Grant says:

    Elliot, I am surprised that the Fed thinks the economy is strong enough to warrant an increase in rates, when the real UE rate is 9.3%. Most new jobs are created by small businesses in rural America and rural America is getting hammered out there. What will higher rates do to this part of the job creation world? I see a lot of small businesses dealing with lower sales, more expenses and no real increase in net income for years. The businesses I deal with that are doing well cannot find skilled labor and cannot afford to pay more to get the labor they need to create more income. If rates go up small business will suffer could this be the bubble in the economy.

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