November 10, 2015
THE TORTOISE AND THE HIRE:
Why the unemployment rate could fall to 3.8% (STEVE GOLDSTEIN, 11/09/15, Marketwatch)
The current economic recovery has, by most measures, been slower and steadier than almost any that have come before.On the one hand, the expansion has lasted 77 months -- the fifth-longest since 1900. On the other, it's taken longer than any recovery since World War II to reach the same growth in output, according to Minneapolis Fed data.But David Kelly, chief global strategist at J.P. Morgan Funds, says the current recovery actually does resemble the others in one respect -- the speed at which the labor market healed itself.He points out that, since 1960, each expansion has generated a decline in the unemployment rate of 0.7% per year on average.In this current recovery, the unemployment rate has dropped at a rate of 0.8% per year.Kelly, in a note to clients, says this pace can be continued, all the way into April 2017. If he's right, the unemployment rate will have fallen to 3.8% by then.
Posted by Orrin Judd at November 10, 2015 5:16 PM