San Francisco Fed Economic Letter: Estimating Natural Rates of Unemployment

[Federal Reserve Bank San Francisco Economic Letter 2022-14, by Brandyn Bok and Nicolas Petrosky-Nadeau]

Before the pandemic, the U.S. unemployment rate reached a historic low that was close to estimates of its underlying longer-run value and the short-run level associated with an absence of inflationary pressures. After two turbulent years, unemployment has returned to its pre-pandemic low, and the estimated underlying longer-run unemployment rate appears largely unchanged. However, economic disruptions appear to have pushed up the short-run noninflationary rate substantially, as high as 6%. Examining these different measures of the natural rate of unemployment can provide useful insights for policymakers.

Read the full article [archived PDF].

Essay 114: FRBSF Economic Letter: Involuntary Part-Time Work a Decade after the Recession

by Marianna Kudlyak

Involuntary part-time employment reached unusually high levels during the last recession and declined only slowly afterward. The speed of the decline was limited because of a combination of two factors: the number of people working part-time due to slack business conditions was declining, and the number of those who could find only part-time work continued to increase until 2013. Involuntary part-time employment recently returned to its pre-recession level but remains slightly elevated relative to historically low unemployment, likely due to structural factors.

Read the full article at the Federal Reserve Bank of San Francisco. [Archived PDF]

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