US economy is "now at full employment" – Goldman Sachs
|Economists at Goldman Sachs published a latest report on the US labor market over the weekend, as we head towards the US payrolls data due this Friday.
Key Points:
On a broad range of measures, the US economy is now at full employment
Headline unemployment has fallen below most estimates of the structural rate
The discouraged worker share is back to pre-recession lows
Still somewhat elevated share of involuntary part-timers is arguably structural
The employment/population ratio remains well below its pre-recession level
(this) gap is fully explained by a combination of population aging and declining participation of prime-age men
This trend among prime-age men has continued for over six decades, has not stood in the way of a strong recent wage acceleration in that demographic, and therefore looks structural
Job growth remains well above the pace needed to stabilize unemployment
The speed of the likely overshoot is comparable to the average postwar cycle
We have lowered our end-2018 unemployment rate forecast to 4.1% from 4.3% prior
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