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What constitutes substantial employment gains in today’s labor market?

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  • Mark E. Schweitzer
  • Murat Tasci

Abstract

The Federal Open Market Committee (FOMC) has tied its asset purchases to a ?substantial improvement? in labor market conditions. While we don?t speculate on what the FOMC means by substantial improvement, we do explore the level of monthly job gains that would gradually deliver the underlying trend unemployment rate within a reasonable timeframe, under several plausible scenarios. We find that the path of monthly job gains, which is highly dependent on a few key parameters, is likely to be smaller than the path associated with previous recoveries.

Suggested Citation

  • Mark E. Schweitzer & Murat Tasci, 2013. "What constitutes substantial employment gains in today’s labor market?," Economic Commentary, Federal Reserve Bank of Cleveland, issue Jun.
    • Handle: RePEc:fip:fedcec:y:2013:i:jun7:n:2013-07
    DOI: 10.26509/frbc-ec-201307
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    References listed on IDEAS

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    1. Christopher J. Erceg & Andrew T. Levin, 2014. "Labor Force Participation and Monetary Policy in the Wake of the Great Recession," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 46(S2), pages 3-49, October.
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    3. Murat Tasci, 2012. "The Ins and Outs of Unemployment in the Long Run: Unemployment Flows and the Natural Rate," Koç University-TUSIAD Economic Research Forum Working Papers 1233, Koc University-TUSIAD Economic Research Forum.
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    Cited by:

    1. Marianna Kudlyak, 2013. "A Cohort Model of Labor Force Participation," Economic Quarterly, Federal Reserve Bank of Richmond, issue 1Q, pages 25-43.

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