PaRT 1 RECENT ECONOMIC AND FINANCIAL DEVELOPMENTS Domestic Developments during the past few years is consistent wit The labor market strengthened further an overall picture of improving labor market during the second half of 2017 and early conditions. In line with this perspective, the LFPR for individuals aged 25 to 54-which is this year much less sensitive to population aging-has Payroll employment has continued to post been rising since 2015. The employment- solid gains, averaging 182,000 per month to-population ratio for individuals 16 and in the seven months starting in July 2017 older-that is, the share of people who are about the same pace as in the first half of working-was 60.1 percent in January and has 2017. Although net job creation last year was been increasing since 2011; this gain primarily slightly slower than in 2016, it has remained reflects the decline in the unemployment rate considerably faster than what is needed, on (The box""How Tight Is the Labor Market? verage. to absorb new entrants to the labor describes the available measures of labor force and is therefore consistent with the market slack in more detail.) view that the labor market has strengthened further(figure 1). The strength of the labor market is also evident in the decline in the continuing strong labor demand. The unemployment rate to 4. 1 percent in January, number of people filing initial claims for V4 percentage point below its level in June 2017 unemployment insurance has remained near and about percentage point below the its lowest level in decades. As reported in the median of Federal Open Market Committee Job Openings and Labor Turnover Survey, the (FOMC) participants' estimates of its longer rate of job openings remained elevated in the run normal level (figure 2 second half of 2017, while the rate of layoffs remained low. In addition, the rate of quits Other indicators also suggest that labor stayed high, an indication that workers are able market conditions have continued to tighten to obtain a new job when they seek one The labor force participation rate(LFPR) that is, the share of adults either working o actively looking for work-was 62.7 percent 3. Initial claims jumped in the fall of 2017 as a in January. The LFPR is little changed, on onsequence of disruptions from the hurricanes and then net, since early 2014 (figure 3). owever, the returned to a low level average age of the population is continuing to increase. In particular, the members of the 1. Net change in payroll employment baby-boom cohort increasingly are moving into their retirement years, a time when labor mp地 force participation typically is low. That development implies that a sustained period in which the demand for and supply of labor were in balance would be associated with a downward trend in the overall participation Total nonfarm rate. Accordingly, the flat profile of the LFPR 2. The hurricanes that struck the United States during the second half of last year caused substantial variation in the month-to-month pattern of job gains, but the L1111111」 average performance over the period 2009201020112012201320142015201620172018 probably substantially unaffected. SOURCE: Bureau of Labor Statistics via Haver Analytics
5 Domestic Developments The labor market strengthened further during the second half of 2017 and early this year Payroll employment has continued to post solid gains, averaging 182,000 per month in the seven months starting in July 2017, about the same pace as in the first half of 2017.2 Although net job creation last year was slightly slower than in 2016, it has remained considerably faster than what is needed, on average, to absorb new entrants to the labor force and is therefore consistent with the view that the labor market has strengthened further (figure 1). The strength of the labor market is also evident in the decline in the unemployment rate to 4.1 percent in January, ¼ percentage point below its level in June 2017 and about ½ percentage point below the median of Federal Open Market Committee (FOMC) participants’ estimates of its longerrun normal level (figure 2). Other indicators also suggest that labor market conditions have continued to tighten. The labor force participation rate (LFPR)— that is, the share of adults either working or actively looking for work—was 62.7 percent in January. The LFPR is little changed, on net, since early 2014 (figure 3). However, the average age of the population is continuing to increase. In particular, the members of the baby-boom cohort increasingly are moving into their retirement years, a time when labor force participation typically is low. That development implies that a sustained period in which the demand for and supply of labor were in balance would be associated with a downward trend in the overall participation rate. Accordingly, the flat profile of the LFPR 2. The hurricanes that struck the United States during the second half of last year caused substantial variation in the month-to-month pattern of job gains, but the average performance over the period as a whole was probably substantially unaffected. during the past few years is consistent with an overall picture of improving labor market conditions. In line with this perspective, the LFPR for individuals aged 25 to 54—which is much less sensitive to population aging—has been rising since 2015. The employmentto-population ratio for individuals 16 and older—that is, the share of people who are working—was 60.1 percent in January and has been increasing since 2011; this gain primarily reflects the decline in the unemployment rate. (The box “How Tight Is the Labor Market?” describes the available measures of labor market slack in more detail.) Other indicators are also consistent with continuing strong labor demand. The number of people filing initial claims for unemployment insurance has remained near its lowest level in decades.3 As reported in the Job Openings and Labor Turnover Survey, the rate of job openings remained elevated in the second half of 2017, while the rate of layoffs remained low. In addition, the rate of quits stayed high, an indication that workers are able to obtain a new job when they seek one. 3. Initial claims jumped in the fall of 2017 as a consequence of disruptions from the hurricanes and then returned to a low level. Total nonfarm 800 600 400 200 + _ 0 200 400 Thousands of jobs 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1. Net change in payroll employment 3-month moving averages Private SOURCE: Bureau of Labor Statistics via Haver Analytics. Part 1 Recent Economic and Financial Developments
6 PART 1: RECENT ECONOMIC AND FINANCIAL DEVELOPMENTS 2. Measures of labor underutilization Percent U-4 10 2008 010 NOTE: Unemployment rate measures total unemployed as a percentage of the labor force. U-4 measures total unemployed plus discouraged workers, as a SOURcE: Bureau of Labor Statistics via Haver Analytics. Unemployment rates have declined across demographic groups, but unemployment remains high for some groups 3. Labor force participation rates an Unemployment rates have trended downward mployment-to-population ratio across racial and ethnic groups(figure 4). The decline in the unemployment rate for blacks or Percent African Americans over the past few years has been particularly notable. This broad pattern Labor force participation ral is typical: The unemployment rates for blacks and Hispanics tend to rise considerably more than the rates for whites and asians during recessions, and then they decline more rapidly during expansions. Yet even with the recent Employmenl-lo-population rato narrowing, the disparities in unemployment labor force participation rat rates across demographic groups remain substantial and largely the same as before the ⊥⊥⊥⊥⊥⊥⊥⊥⊥⊥⊥⊥⊥⊥⊥⊥⊥⊥1」 recession. The unemployment rate for whites has averaged 3.7 percent since the middle of NOTE: The data are monthly. The prime-age labor force participation rat of the population aged 25 to 54. The labor force participation 2017 and the rate for Asians has been about loyment-to-population ratio are percentages of the population 3.3 percent, while the unemployment rates for reau of Labor Statistics via Haver Analytics. Hispanics or Latinos(5.0 percent)and blacks (7.3 percent) have been substantially higher In addition, the labor force participation rates for blacks, Hispanics, and Asians have generally been lower than those for whites of the same age group. As the labor market
6 Part 1: Recent Economic and Financial Developments Employment-to-population ratio Prime-age labor force participation rate 56 58 60 62 64 66 68 Percent 80 81 82 83 84 85 2002 2006 2010 2014 2018 3. Labor force participation rates and employment-to-population ratio Percent Labor force participation rate NOTE: The data are monthly. The prime-age labor force participation rate is a percentage of the population aged 25 to 54. The labor force participation rate and the employment-to-population ratio are percentages of the population aged 16 and over. SOURCE: Bureau of Labor Statistics via Haver Analytics. Unemployment rates have declined across demographic groups, but unemployment remains high for some groups Unemployment rates have trended downward across racial and ethnic groups (figure 4). The decline in the unemployment rate for blacks or African Americans over the past few years has been particularly notable. This broad pattern is typical: The unemployment rates for blacks and Hispanics tend to rise considerably more than the rates for whites and Asians during recessions, and then they decline more rapidly during expansions. Yet even with the recent narrowing, the disparities in unemployment rates across demographic groups remain substantial and largely the same as before the recession. The unemployment rate for whites has averaged 3.7 percent since the middle of 2017 and the rate for Asians has been about 3.3 percent, while the unemployment rates for Hispanics or Latinos (5.0 percent) and blacks (7.3 percent) have been substantially higher. In addition, the labor force participation rates for blacks, Hispanics, and Asians have generally been lower than those for whites of the same age group. As the labor market U-5 U-4 U-6 4 6 8 10 12 14 16 18 Percent 2006 2008 2010 2012 2014 2016 2018 2. Measures of labor underutilization Monthly Unemployment rate NOTE: Unemployment rate measures total unemployed as a percentage of the labor force. U-4 measures total unemployed plus discouraged workers, as a percentage of the labor force plus discouraged workers. Discouraged workers are a subset of marginally attached workers who are not currently looking for work because they believe no jobs are available for them. U-5 measures total unemployed plus all marginally attached to the labor force, as a percentage of the labor force plus persons marginally attached to the labor force. Marginally attached workers are not in the labor force, want and are available for work, and have looked for a job in the past 12 months. U-6 measures total unemployed plus all marginally attached workers plus total employed part time for economic reasons, as a percentage of the labor force plus all marginally attached workers. The shaded bar indicates a period of business recession as defined by the National Bureau of Economic Research. SOURCE: Bureau of Labor Statistics via Haver Analytics
IONETARY POLICY REPORT: FEBRUARY 2018 7 4. Unemployment rate by race and ethnicity 12 Hispanic or Latin White 4 2006 SOURCE: Bureau of Labor Statistics via Haver Analytics has strengthened over the past few years, the participation rates for prime-age individuals in each of these groups have risen Growth of labor compensation has been 5. Measures of change in hourly compensation moderate Percent change from Despite the strong labor market, the available indicators generally suggest that the growth ompensation per hour. business sector of hourly compensation has been moderate Growth of compensation per hour in the Atlanta Feds Wage Growth Tracker business sector-a broad-based measure of wages, salaries, and benefits that is quite 432 volatile-was 2 4 percent over the four quarters ending in 2017: Q4(figure 5), well above the low reading in 2016 but about in Average hourly eamings Employment cost index line with the average annual increase from 2010 to 2015. The employment cost index which also measures both wages and the cost NOTE: Business-sector ensation is on a four-quarter to employers of providing benefits-was up bout 2/2 percent in the fourth quarter of is from 12 months earlier: for the Atlanta Fed's Wage growth Tracker. the 2017 relative to its year-ago level, roughly data are shown as a 3-month moving average of the 12-month percent OURCE: Bureau of Labor Statistics via Haver Analytics: Federal Reserve 4. The compensation per hour measure of wages and Bank of Atlanta. Wage Growth tracke salaries declined at the end of 2016, possibly reflecting the shifting of bonuses or other types of income into 2017 in anticipation of a possible cut in personal income tax rates
MONETARY POLICY REPORT: FEBRUARY 2018 7 has strengthened over the past few years, the participation rates for prime-age individuals in each of these groups have risen. Growth of labor compensation has been moderate . . . Despite the strong labor market, the available indicators generally suggest that the growth of hourly compensation has been moderate. Growth of compensation per hour in the business sector—a broad-based measure of wages, salaries, and benefits that is quite volatile—was 2¼ percent over the four quarters ending in 2017:Q4 (figure 5), well above the low reading in 2016 but about in line with the average annual increase from 2010 to 2015.4 The employment cost index— which also measures both wages and the cost to employers of providing benefits—was up about 2½ percent in the fourth quarter of 2017 relative to its year-ago level, roughly 4. The compensation per hour measure of wages and salaries declined at the end of 2016, possibly reflecting the shifting of bonuses or other types of income into 2017 in anticipation of a possible cut in personal income tax rates. Black or African American Asian Hispanic or Latino 2 4 6 8 10 12 14 16 18 Percent 2006 2008 2010 2012 2014 2016 2018 4. Unemployment rate by race and ethnicity Monthly White NOTE: Unemployment rate measures total unemployed as a percentage of the labor force. Persons whose ethnicity is identified as Hispanic or Latino may be of any race. The shaded bar indicates a period of business recession as defined by the National Bureau of Economic Research. SOURCE: Bureau of Labor Statistics via Haver Analytics. Employment cost index Atlanta Fed's Wage Growth Tracker Average hourly earnings 1 + _ 0 1 2 3 4 5 6 Percent change from year earlier 2010 2012 2014 2016 2018 5. Measures of change in hourly compensation Compensation per hour, business sector NOTE: Business-sector compensation is on a four-quarter percentage change basis. For the employment cost index, change is over the 12 months ending in the last month of each quarter; for average hourly earnings, change is from 12 months earlier; for the Atlanta Fed's Wage Growth Tracker, the data are shown as a 3-month moving average of the 12-month percent change. SOURCE: Bureau of Labor Statistics via Haver Analytics; Federal Reserve Bank of Atlanta, Wage Growth Tracker
8 PART 1: RECENT ECONOMIC AND FINANCIAL DEVELOPMENTS How Tight Is the Labor Market? Any assessment of labor market tightness is The fact that the LFPR for prime-age men remains inherently uncertain, as it involves comparing current below its pre-recession levels might suggest that slack labor market conditions with an estimate of conditions remains along this dimension; however, the lower that would prevail under full employment, where the level of the LFPR for prime-age men primarily seems latter circumstance cannot be directly observed or to reflect the continuation of a decades-long secular measured and can change over time. Many economists decline rather than a cyclical shortfall in their LFPR. In would describe the labor market as being at full addition the u-6 measure of labor utilization --which employment when the unemployment rate has reached includes the unemployed, those marginally attached an"equilibrium"level, sometimes called the natura to the labor force, and those employed part time who rate of unemployment or the longer-run normal rate of would like full-time work-rose even more steeply unemployment In judging the level of full employment, than the unemployment rate during and immediately one may also consider additional margins of labor after the recession and has since recovered to near utilization-including the labor force participation rate its pre-recession level. Although there is substantial (LFPR), the share of workers employed part time who uncertainty about the trends in each of the components would like to be working full time, and individuals of U-6, its current level can be cautiously interpreted who are classified as marginally attached to the labor as consistent with a labor market close to full force--as compared with trends in these measures employment While the uncertainty around the"normal"trends in One can also look at less-direct indicators of labor all of these variables is substantial, the labor market market tightness. For example, the share of small in early 2018 appears to be near or a little beyond full businesses with at least one job opening that they view as hard to fill is now close to its record levels in the late The unemployment rate is now somewhat below 1990s(as seen in the black line in figure B),consistent most estimates of its natural rate. Specifically, the with the notion that as the labor market tightens, unemployment rate in January, at 4.1 percent, is businesses find it increasingly difficult to hire additional 12 percentage point below the median of Federal Or workers. Similarly, survey measures of households Market Committee(FOMC) participants'estimates of the longer-run normal rate of unemployment, which Galbis-Reig, Christopher Smith, and William Wascher(2014), percent as of the Labor Force Participation: Recent Developments and December 2017 FOMC meeting. The unemployment Future Prospects, Brookings Papers on Economic Activity, rate is also about v2 percentage point below the uploads/2016/07/Fall2014BPEA Aard Congressional Budget Office's(CBO)current estima Estimates of trend LFPR are also prowided by the CBo in their of the natural rate; by this measure, the labor market is recurring publication The Budget and Economic Outlook and about as tight as it was in the late 1980s but less tight its updates than in the late 1990s(figure A). That said, the median of FOMC participants' estimates of the longer-run A. Unemployment rate gap normal rate of unemployment and the CBOs estimate Quarterly Percent of labor of the natural rate of unemployment have both been revised down by about 1 percentage point over the past indication of the substantial uncertainty surrounding estimates of the "full employment"rate of As discussed in the main text, the lfPr has been presenting an important cyclical improvemen roughly unchanged, on net, over the past four year relative to its declining trend. While estimates of the trend LFPR are subject to substantial uncertainty and mong analysts, the current level of the LFPR is relatively close to many estimates of its trend LINLLLLLLLLLLLLLLLLLLLLILLI」 1981198519891993199720012005200920132017 1. As another indication of this uncertainty FOMC participants'estimates of the longer-run normal rate of NOTE: The unem nt rate gap is the un unemployment was 4.3 to 5.0 percent in December 2017 Congressional Budget Office's estimate of the natural rate of unemploymer ars indicate periods of business recession as defined by the For a variety of approaches to assessing the lev National Bureau of Economic Research of trend LFPR and the associated range of estimates, see SOURcE: For unemp Stephanie Aaronson, Tomaz Cajner, Bruce Fallick, Felix rate of unemployment, Coment rate. Bureau of Labor Statistics: for natural gressional Budget Office: all via Haver Analytics
8 Part 1: Recent Economic and Financial Developments The fact that the LFPR for prime-age men remains below its pre-recession levels might suggest that slack remains along this dimension; however, the lower level of the LFPR for prime-age men primarily seems to reflect the continuation of a decades-long secular decline rather than a cyclical shortfall in their LFPR. In addition, the U-6 measure of labor utilization—which includes the unemployed, those marginally attached to the labor force, and those employed part time who would like full-time work—rose even more steeply than the unemployment rate during and immediately after the recession and has since recovered to near its pre-recession level. Although there is substantial uncertainty about the trends in each of the components of U-6, its current level can be cautiously interpreted as consistent with a labor market close to full employment. One can also look at less-direct indicators of labor market tightness. For example, the share of small businesses with at least one job opening that they view as hard to fill is now close to its record levels in the late 1990s (as seen in the black line in figure B), consistent with the notion that as the labor market tightens, businesses find it increasingly difficult to hire additional workers. Similarly, survey measures of households’ Any assessment of labor market tightness is inherently uncertain, as it involves comparing current labor market conditions with an estimate of conditions that would prevail under full employment, where the latter circumstance cannot be directly observed or measured and can change over time. Many economists would describe the labor market as being at full employment when the unemployment rate has reached an “equilibrium” level, sometimes called the natural rate of unemployment or the longer-run normal rate of unemployment. In judging the level of full employment, one may also consider additional margins of labor utilization—including the labor force participation rate (LFPR), the share of workers employed part time who would like to be working full time, and individuals who are classified as marginally attached to the labor force—as compared with trends in these measures. While the uncertainty around the “normal” trends in all of these variables is substantial, the labor market in early 2018 appears to be near or a little beyond full employment. The unemployment rate is now somewhat below most estimates of its natural rate. Specifically, the unemployment rate in January, at 4.1 percent, is ½ percentage point below the median of Federal Open Market Committee (FOMC) participants’ estimates of the longer-run normal rate of unemployment, which was reported to have been 4.6 percent as of the December 2017 FOMC meeting. The unemployment rate is also about ½ percentage point below the Congressional Budget Office’s (CBO) current estimate of the natural rate; by this measure, the labor market is about as tight as it was in the late 1980s but less tight than in the late 1990s (figure A). That said, the median of FOMC participants’ estimates of the longer-run normal rate of unemployment and the CBO’s estimate of the natural rate of unemployment have both been revised down by about 1 percentage point over the past few years, one indication of the substantial uncertainty surrounding estimates of the “full employment” rate of unemployment.1 As discussed in the main text, the LFPR has been roughly unchanged, on net, over the past four years, representing an important cyclical improvement relative to its declining trend. While estimates of the trend LFPR are subject to substantial uncertainty and differ among analysts, the current level of the LFPR is relatively close to many estimates of its trend.2 How Tight Is the Labor Market? 1. As another indication of this uncertainty, the range of FOMC participants’ estimates of the longer-run normal rate of unemployment was 4.3 to 5.0 percent in December 2017. 2. For a variety of approaches to assessing the level of trend LFPR and the associated range of estimates, see Stephanie Aaronson, Tomaz Cajner, Bruce Fallick, Felix 1 + _ 0 1 2 3 4 5 Percent of labor force 1981 1985 1989 1993 1997 2001 2005 2009 2013 2017 A. Unemployment rate gap Quarterly NOTE: The unemployment rate gap is the unemployment rate minus the Congressional Budget Office's estimate of the natural rate of unemployment. The shaded bars indicate periods of business recession as defined by the National Bureau of Economic Research. SOURCE: For unemployment rate, Bureau of Labor Statistics; for natural rate of unemployment, Congressional Budget Office; all via Haver Analytics. Galbis-Reig,Christopher Smith, and William Wascher (2014), “Labor Force Participation: Recent Developments and Future Prospects,” Brookings Papers on Economic Activity, Fall, pp. 197–275, https://www.brookings.edu/wp-content/ uploads/2016/07/Fall2014BPEA_Aaronson_et_al.pdf. Estimates of trend LFPR are also provided by the CBO in their recurring publication The Budget and Economic Outlook and its updates
MONETARY POLICY REPORT: FEBRUARY 2018 9 perceptions about job availability are currently at high taken longer for businesses to find workers in recent levels, as shown by the blue line in figure B years, yet wage growth has remained steady or slowed However, despite reports that employers are now Finally, while the aggregate labor market appears having more difficulties finding qualified workers, to be modestly tight at the moment, not all individual hiring has continued apace. Although payroll have benefited equally from these developments. employment gains have gradually slowed over time discussed in the main text, noticeable differences from about 250, 000 per month, on average, in 2014 in labor market outcomes remain present across to about 180,000 per month, on average, in 2017, job racial and ethnic groups. Moreover, the labor market growth remains consistent with further strengthening improvement in recent years has not been sufficient in the labor market. Finally, the pace of wage gains to make important progress in narrowing income has been moderate; while wage gains have likely been inequality. Finally, regional disparities are also striking, held down by the sluggish pace of productivity growth and in certain aspects these disparities have widened in recent years, serious labor shortages would probably in recent years; for example, the employment- bring about larger increases than have been observed to-population ratio for prime-age individuals has thus far recovered less for those outside of metro areas than for It is possible that labor shortages have arisen in those in metro areas(figure O). 5 certain pockets of the economy, which could be an early indication of bottlenecks that are not yet read transportation, health and education, leisure and hospitality, apparent in the aggregate labor market. However, even and professional and business services emerging supply constraints. In some industries, such as in Metropolitan and Non-metropolitan Areas: Signs of trade and transportation as well as leisure and hospitality, Growing Disparities, FEDS Notes (Washington: Board of employment growth has slowed markedly and it has Governors of the Federal Reserve System, September 25) https://www.federalreserve.gov/econres/notes/feds-notes/abor market-outcomes-in-metropolitan-and-non-metropolitan 3. Payroll gains in the range of about 90, 000 to 120,000 areas-signs-of-growing-disparities-20170925htm re estimated to be consistent with a constant nt rate and a decline in the labor force alysis behind this statement considered broad industries struction, manufacturing trade and C. Prime-age employment-to-population ratio by B. Job availability and hard-to-fill positions 35 Job availal 15 LL⊥L⊥_⊥L⊥⊥⊥⊥⊥⊥⊥⊥⊥⊥⊥⊥L」 199619982000200220042006200820102012201420162018 NOTE: The data are 12-month centered moving averages. Larg 1982198619901994199820022006201020142018 ds believing jobs are periods of business recession as defined by the National Bureau of Economic plentiful minus the proportion believing jobs are hard to get, plus 100. Research. moving average of the percent of small businesses surveyed with at least one hard-to-fill job opening. Metropolitan and Non-metropolita seasona from the National Federation of Independent Business start in stem, september 25), wiww. fed ral reserve goy National Bureau of Economic Rescarch. Data are moston as detine SOURCE: For job availability, Conference Board; for hard-to-fill, National Census Bureau, Current Population Survey; note that the Bureau of Labor Federation of Independent Business. Statistics is involved in the survey process for the Current Population Survey
MONETARY POLICY REPORT: FEBRUARY 2018 9 taken longer for businesses to find workers in recent years, yet wage growth has remained steady or slowed. Finally, while the aggregate labor market appears to be modestly tight at the moment, not all individuals have benefited equally from these developments. As discussed in the main text, noticeable differences in labor market outcomes remain present across racial and ethnic groups. Moreover, the labor market improvement in recent years has not been sufficient to make important progress in narrowing income inequality. Finally, regional disparities are also striking, and in certain aspects these disparities have widened in recent years; for example, the employmentto-population ratio for prime-age individuals has recovered less for those outside of metro areas than for those in metro areas (figure C).5 perceptions about job availability are currently at high levels, as shown by the blue line in figure B. However, despite reports that employers are now having more difficulties finding qualified workers, hiring has continued apace. Although payroll employment gains have gradually slowed over time from about 250,000 per month, on average, in 2014 to about 180,000 per month, on average, in 2017, job growth remains consistent with further strengthening in the labor market.3 Finally, the pace of wage gains has been moderate; while wage gains have likely been held down by the sluggish pace of productivity growth in recent years, serious labor shortages would probably bring about larger increases than have been observed thus far. It is possible that labor shortages have arisen in certain pockets of the economy, which could be an early indication of bottlenecks that are not yet readily apparent in the aggregate labor market. However, even at the industry level it is difficult to see much evidence of emerging supply constraints.4 In some industries, such as trade and transportation as well as leisure and hospitality, employment growth has slowed markedly and it has Job availability 20 40 60 80 100 120 140 160 Index 5 10 15 20 25 30 35 1982 1986 1990 1994 1998 2002 2006 2010 2014 2018 B. Job availability and hard-to-fill positions Percent Hard-to-fill NOTE: Job availability is the proportion of households believing jobs are plentiful minus the proportion believing jobs are hard to get, plus 100. Hard-to-fill is the three-month moving average of the percent of small businesses surveyed with at least one hard-to-fill job opening, and it is seasonally adjusted by Federal Reserve Board staff. Monthly hard-to-fill data from the National Federation of Independent Business start in January 1986. The shaded bars indicate periods of business recession as defined by the National Bureau of Economic Research. Data are monthly. SOURCE: For job availability, Conference Board; for hard-to-fill, National Federation of Independent Business. 3. Payroll gains in the range of about 90,000 to 120,000 per month are estimated to be consistent with a constant unemployment rate and a decline in the labor force participation rate in line with its demographically driven trend. 4. The analysis behind this statement considered six broad industries—construction, manufacturing, trade and Non-metro Smaller MSAs 72 74 76 78 80 82 Percent 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 C. Prime-age employment-to-population ratio by metropolitan status Monthly Larger MSAs NOTE: The data are 12-month centered moving averages. Larger metropolitan statistical areas (MSAs) consist of 500,000 people or more, and smaller MSAs consist of 100,000 to 500,000 people. The shaded bars indicate periods of business recession as defined by the National Bureau of Economic Research. SOURCE: Alison Weingarden (2017), “Labor Market Outcomes in Metropolitan and Non-metropolitan Areas: Signs of Growing Disparities,” FEDS Notes (Washington: Board of Governors of the Federal Reserve System, September 25), www.federalreserve.gov/econres/notes/feds-notes/ labor-market-outcomes-in-metropolitan-and-non-metropolitan-areas-signs-of -growing-disparities-20170925.htm. Calculations use data from the U.S. Census Bureau, Current Population Survey; note that the Bureau of Labor Statistics is involved in the survey process for the Current Population Survey. transportation, health and education, leisure and hospitality, and professional and business services. 5. See Alison Weingarden (2017), “Labor Market Outcomes in Metropolitan and Non-metropolitan Areas: Signs of Growing Disparities,” FEDS Notes (Washington: Board of Governors of the Federal Reserve System, September 25), https://www.federalreserve.gov/econres/notes/feds-notes/labormarket-outcomes-in-metropolitan-and-non-metropolitanareas-signs-of-growing-disparities-20170925.htm