Us Labour Market Case Study - 1513 Words

Fed’s US Labour Market Outlook: Tough to Believe? As we pass the midpoint of 2017, it has become blatantly clear that US labour market slack is rapidly diminishing, as measured by the declining civilian unemployment rate. Meanwhile, against this ever-tightening backdrop, the Federal Open Market Committee’s (FOMC) median forecast for the civilian unemployment rate indicates no further decline during the remainder of this year and a modest drop to 4.2% by 2018 Q4. This baseline outlook is seemingly puzzling, given the FOMC’s overly-pessimistic views about the labour market embedded in earlier economic forecasts. There is a negative relationship between the US unemployment rate and real GDP growth, and this has frequently been referred to as†¦show more content†¦Meanwhile, Fed Chair Yellen has intimated that ageing US demographics would suggest a flat participation rate as the best possible outcome moving forward. Critically, this baseline labour supply outlook is also incompatible with an unchanged unemployment rate forecast. The FOMC could, therefore, face questions about the credibility of its estimates, an outcome members will be keen to avoid. There are, however, a number of escape routes for the FOMC to utilise. Firstly, members could aggressively lower their estimate of the natural rate of unemployment, and, secondly, the policy reaction function could be subsequently altered to adjust for the lowered target of this important metric, all other things being equal. Reducing the estimate of the natural rate of unemployment would suggest the economy is currently further away from full employment than originally envisaged. The policy reaction function could, therefore, be adjusted with a dovish tilt, particularly if inflation continued to undershoot the FOMC’s 2% target. Forward guidance to interest rate normalisation would subsequently require revision. Meanwhile, the reluctance of the FOMC to lower their estimate of the unemployment rate or change the policy reaction function from its current hawkish tilt has the hallmarks of a central bank being locked into a somewhat dogmatic path of interest rate normalisation, at least for the time being. High Unemployment Undershooting Risks Imply Entrenched HawkishShow MoreRelatedLabour Market Need 1234 Words   |  5 Pagesthese outcomes is a labour market need for migrant workers to fill jobs that indigenous workers reject (Fellini et al., 2007; Massey et al., 1998; Piore, 1979). However, this is not a spontaneous process and it is important to recognize the role played by labour market actors, particularly employers (or their agents) and the state (Bach, 2007; Rodriguez, 2004). Employers engage in active recruitment strategies to attract immigrant workers already in national labour markets or to recruit directlyRead MoreClaims About Wrong Strategic Direction Summary1604 Words   |  7 Pageslogistics revolution in relation to the employees and workers. Bonacich, Edna and Wilson, (2008:VII) shows their intention in the beginning of the book with the following statement, - this book tells the story of those workers and the work they do to get us the goods we all depend on. This statement demonstrates the importance of the workers in respect to delivering the goods to the end consumers. Likewise, the authors also made the following statement, - We are interested†¦ in their potential for organisingRead MoreCase: Wage and Stonewall Industries Limited1670 Words   |  7 PagesHRM822 Strategic Human Resources Planning Case Study( This case is fictional.  © 2009 Seneca College) Stonewall Industries Limited by Charles Purchase Read the following case study carefully.  · The case study will form the basis of three individual assignments that are to be completed at various points in the course.  · For all responses to each assignment, provide the rationale for your answers and any assumptions that you are making.  · Before you begin, ensure that you have followedRead MoreMinimum Wage Essay1068 Words   |  5 PagesWorkers want better paying job and at the same time employers want to control labour cost. Therefor government put the floor of minimum wage â€Å"a minimum wage is the lowest wage that each employee can legally get from an employer† (exclusive papers). This is the lowest amount that a worker can sell his/her labour and that is what we need for better economy right now especially not a price ceiling which is a set below the market price, then a shortage is created; the quantity demanded will exceed theRead MoreCase Study Martin Textile Starbuck1000 Words   |  4 Pagescountry of origin? CASE STUDY 1 MARTIN TEXTILES Question 1 Economic cost The production cost that is labour cost if Martin Textile shift its production to Mexico will be reduced to less than USD2 per hour as compared to wage rate paid to its unionised New York plant(USD12.50 per hour) and non unionised textile plant in southeastern US(USD8 to USD10 per hour). The production too will be able to avoid cost disadvantage that they have to face in US due to tougher and stricter labour law, regulationsRead MoreCase Study : South Africa Essay1498 Words   |  6 PagesCase study: South Africa South Africa is an upper-middle income country with a population of 52 million people and a GDP of 312.80 billion US dollars (â€Å"Statistics South Africa | The South Africa I Know, The Home I Understand†, n.d.). The country has the second largest economy in Africa; it plays a prominent role in sub-Saharan Africa and in the continent as a whole. South Africa was hugely shaped by the apartheid legacy, a system of racial segregation that began during the colonial rule and was officiallyRead MoreThe Price Of Minimum Wage1406 Words   |  6 Pagesgovernment per working hour. One of the main benefits of this was that the most low skills jobs within society received a fair wage. Setting the price of minimum wage is a complex task as the main priority is to reduce the negative effect on the labour market, creating benefits outweighing the costs. Inflation and minimum wage have a very close relationship, with inflation being the annual increase in the price of goods and services. As inflation rises, it is natural for minimum wage to follow at aRead MoreGlobalization Is A Positive Way Or Negative Way?1034 Words   |  5 Pagesaccess new markets across the world. It has also resulted in increased transportation and communication between the developing countries and developed countries. Forcing farmers of developing countries to produce export foods and local foods resulting to more money for their own country and family respectively. There are many benefits of globalization and one of them is the free movement of labour. In a globalized world, workers can easily move from one country to another to market their skillsRead MoreCapital Inflow, Capacity Expansion And Wage Gap : A Theoretical Evaluation Essay1742 Words   |  7 PagesThe paper examines how capital flow contributes to capacity expansion, employment generation and welfare. In so doing we use both partial equilibrium and general equilibrium framework. In particular, we choose an industrial organization approach to study the effect of rise in capital inflow in perfect competition and monopoly. While using the general equilibrium framework we consider a small open economy consisting of 3 sectors.viz.- Service, manufacturing and agricultural sector. The service sectorRead MoreImpact Of Trade On The International Trade Market1489 Words   |  6 Pagespolicies to restrict particular exports? To address this question, this essay aims to explore the impact of trade on various economic stakeholders, including consumers, producers, labour and government and, furthermore, will compare models and theories with reality to ascertain the true winner/ loser in the international trade market. According to the Ricardian model, free trade allows a country to benefit from incremental relative prices of exported goods and higher utility gained due to imported goods