Economics
Summers Says U.S. Unemployment Is Now Below Its ‘Natural’ Rate
- Jobless rate dropped in September even as payroll gains slowed
- Economists have debated Covid crisis having long-term effects
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Former Treasury Secretary Lawrence Summers said changes in the U.S. job market caused by the Covid-19 crisis mean that the jobless rate is now likely below levels that trigger inflation even though it remains above its pre-pandemic trend.
With American payrolls still down by almost 5 million compared with the peak before Covid-19 struck, theory would suggest there’s enough job-market slack that it wouldn’t cause inflationary pressure. But some economists have discussed the risk that the pandemic has persuaded a swath of the population to permanently leave the workforce -- such as by retiring early.