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Fed Weighs More Ambitious Goal for Sweet Spot on Employment

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El-Erian: Wage Growth Is Just a Matter of Time

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As the U.S. jobless rate reaches the range that the Federal Reserve defines as full employment, some Fed officials are asking a question: How low can you go?

Their answer: less than the 5.2 percent to 5.5 percent the Fed currently defines as the lowest that can be achieved without heating up inflation. Some Chicago Fed economists say this sweet spot, often called full employment or the natural rate of unemployment, may be as low as 5 percent.