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Summers Says U.S. Unemployment Is Now Below Its ‘Natural’ Rate

Oct. 8, 2021, 6:07 PM

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.

WATCH: Lawrence Summers says he’s concerned about the economy.
Source: Bloomberg)

“Given the vast structural ...

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