A closer look at the US labor market | Eurobank
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A closer look at the US labor market

• The US labor market keeps on strengthening, with nonfarm payrolls and civilian employment reporting robust monthly gains.
• However, mismatches between available jobs and available workers weighs on the pace of the labor market recovery.
• Reentrants into the labor force should not reverse the downward trend in the unemployment rate.
• The historical relationship between movements in the unemployment rate and real GDP growth has broken down since the 2007-09 recession, as fluctuations in productivity and financial uncertainty has affected firms’ hiring and firing decisions.
• Further significant improvement in the labor market should be accompanied by faster economic expansion. Our GDP growth forecast of 2.0% in 2012 suggests modest and gradual progress reducing unemployment, averaging at around 8.2% in 2012 from 8.9% in 2011.