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US Economy Reaching "Full Capacity"

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Economy

http://www.economist.com/blogs/freeexchange/2014/09/federal-reserve

Although economic growth the last 5 years has consistantly come below expectations, unemployment has fallen faster than expected and unemployment is already down to 6.1%

The issue is that the aging population and longer school years for kids is having an even bigger impact on the labor force participation rate than was originally thought.

This means the economy will not be able to be as productive and strong as it will reach "full employment" and therefore its "full capacity" before economic activity reaches what it was hoped it would reach

"In 2-3 years we will be in full capacity and full employment" says an economist. "But i dont think people will like what that new normal looks like"

:MANiCURE:

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Woolfsmck

http://www.economist.com/blogs/freeexchange/2014/09/federal-reserve

Although economic growth the last 5 years has consistantly come below expectations, unemployment has fallen faster than expected and unemployment is already down to 6.1%

The issue is that the aging population and longer school years for kids is having an even bigger impact on the labor force participation rate than was originally thought.

This means the economy will not be able to be as productive and strong as it will reach "full employment" and therefore its "full capacity" before economic activity reaches what it was hoped it would reach

"In 2-3 years we will be in full capacity and full employment" says an economist. "But i dont think people will like what that new normal looks like"

:manicure:

hmmm.. full employment would be measured at 2% unemployment... those in between jobs, or those in early retirement.
like a cat in a sil, I observe life, moving and still. My words give a clue,look inside to see whats true

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hmmm.. full employment would be measured at 2% unemployment... those in between jobs, or those in early retirement.

2%???? thats a freggin labor shortage :ohno: Most articles ive read and most economists who speak put full employment in the range of 4% to 4.5%

Jezz here in Canada in 2007 Alberta reached its worst point of the "labor shortage" and the lowest unemployment reached was 3.1%

Norway and Switzerland have super low unemployment and on and off labor shortages and it usually doesnt dip below 3% at least not for long :shrug:

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Woolfsmck

2%???? thats a freggin labor shortage :ohno: Most articles ive read and most economists who speak put full employment in the range of 4% to 4.5%

Jezz here in Canada in 2007 Alberta reached its worst point of the "labor shortage" and the lowest unemployment reached was 3.1%

Norway and Switzerland have super low unemployment and on and off labor shortages and it usually doesnt dip below 3% at least not for long :shrug:

Montana right now has 4% unemployment, and some projects are on hold because the bidders can't guarantee completion times due to lack of personnel. Basically, the available unemployed aren't qualified enough to get hired for the jobs that are unfilled.

The goes back to the education system, and the guidance that many are receiving.

Germany spends less on general education at the higher levels and more on trade schools. they have had a labor shortage for a long time and this was their solution... trade schools educate the students for a specific task or skill rather than randomly generalizing hoping that some thing will spark....

I think more and more of the industrialized countries will face a similar transition if they want to continue to expand production.

like a cat in a sil, I observe life, moving and still. My words give a clue,look inside to see whats true

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Montana right now has 4% unemployment, and some projects are on hold because the bidders can guarantee completion times due to lack of personnel. Basically, the available unemployed aren't qualified enough to get hired for the jobs that are unfilled.

which basically proves my point

"Full emoyment" is what is considered that balance when employment is plentiful enough for people to have access to jobs but not to the point where companies have a hard time finding workers

I guess its what they consider the perfect level of unemployment when the economy is most efficient

In the US its 4% and here in Canada its 5%. Actually its the same thing but our methology of measuring unemployment gives us around 1% higher

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Woolfsmck

which basically proves my point

"Full emoyment" is what is considered that balance when employment is plentiful enough for people to have access to jobs but not to the point where companies have a hard time finding workers

I guess its what they consider the perfect level of unemployment when the economy is most efficient

In the US its 4% and here in Canada its 5%. Actually its the same thing but our methology of measuring unemployment gives us around 1% higher

I define full employment as all jobs are filled and all seekers have a job...

The gap is matching skills with need... and the higher the percent, the greater the educational malfunction....

unless there is a recession/depression , then many people are unwillfully unemployed...

2% is ideal but unrealistic since there will always be that gap imo.

like a cat in a sil, I observe life, moving and still. My words give a clue,look inside to see whats true

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I define full employment as all jobs are filled and all seekers have a job...

The gap is matching skills with need... and the higher the percent, the greater the educational malfunction....

unless there is a recession/depression , then many people are unwillfully unemployed...

2% is ideal but unrealistic since there will always be that gap imo.

well ideally perhaps

But the point is that that once it reaches 4% the economy struggles to grow past that and its at full capacity. And its "full capacity" now is less productive than the full capacity before

I agree that the skills mismatch is an issue and woukd help matters tho. Most Nations have that issue actually, developed, developing and 3rd world :MANiCURE:

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