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”.

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