Ahead of the jobs report due Friday from the US, this from Goldman Sachs:
On a broad range of measures, the US economy is now at full employment
- Headline unemployment has fallen below most estimates of the structural rate
- The discouraged worker share is back to pre-recession lows
- Still somewhat elevated share of involuntary part-timers is arguably structural
The employment/population ratio remains well below its pre-recession level
- (this) gap is fully explained by a combination of population aging and declining participation of prime-age men
- This trend among prime-age men has continued for over six decades, has not stood in the way of a strong recent wage acceleration in that demographic, and therefore looks structural
Job growth remains well above the pace needed to stabilize unemployment
- The speed of the likely overshoot is comparable to the average postwar cycle
- We have lowered our end-2018 unemployment rate forecast to 4.1% from 4.3% prior
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Arguments will continue on whether the US job market is at full employment or not ... but if not then its getting closer (allowing for caveats GS outlines above) ... eyes are now on inflation (though dipping GDP is not being ignored) for clues to the FOMC timing of the next step.
The Federal Open Market Committee meet this week, though expectations are close to zero for any change in rates.
