What is 'normal' employment growth?

Much debate has been circulating lately about what defines “full employment” or what “normal” growth looks like.  The August Payrolls Report was right in line with what economists used to consider “normal” for “normal” economic growth.  Looking at my Leading Economic Indicators, the current trend in employment would point to an economy that is growing at a 3.2% annual rate — right around the long-term average and what most economists consider “normal”.


The problem is really the direction of the long-term trend and how that impacts everyone’s economic models, including how the Fed defines “normal”.


Payroll Change 201608

For more on the long-term issues and what ‘normal’ may look like, see The Grand Experiment and Broken Model.


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New Kent, VA
Jeff joined SEM in October 1998. Outside of SEM, Jeff is part of the worship team at LifePointe Christian Church where he plays the keyboard and bass guitar. He also coaches a club soccer team.