The Economy in Perspective
About that NAIRU jacket … The Bureau of Labor Statistics’ just-released May labor report failed to settle differences of opinion about labor market tightness. The unemployment rate declined to 4.2%, equaling March’s 30-year low. For those who regard the non-accelerating inflation rate of unemployment (NAIRU) to be 5% or greater, May’s report brought disquieting news about future inflation prospects. At the same time, however, net new job creation for the month slowed to only 11,000, a dramatic reduction from the pace of the last 12 months. For those who expect economic activity to slow in the coming months, May’s report could be a long-awaited harbinger.
Suggested citation: "The Economy in Perspective," Federal Reserve Bank of Cleveland, Economic Trends, no. 99-06, pp. 01, 06.01.1999.