We’re Getting Awfully Close to Full Employment -
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There is one prism through which we should analyze the April jobs numbers released Friday
and each of the remaining reports in 2017: How close to full employment are we, really?
In an economy at full employment, pretty much anyone who wants a job can get one, companies have incentive to offer pay raises,
and firms are more inclined to offer training, flexible work arrangements and other concessions that benefit their workers.
But beyond employer caterwauling, the best sign that the economy has reached full employment will be if wage gains return to their pre-recession
norms; wage growth for nonmanagerial workers of 4 percent or more was normal in 2006 and 2007; now that number is only 2.3 percent.
Taken in isolation, these numbers would seem to suggest
that the economy is most certainly at full employment and maybe even running a little hot — that is, revving faster than will be possible in the long run without just fueling inflation.
