The unemployment rate has fallen from 10 percent in 2009 to 4.7 percent in May, essentially at the level that many observers identify as the natural rate.
This rate is very far from a bright line – it cannot be observed directly, and estimates of its level are subject to great uncertainty.1 So we look to a wide range of labor market indicators to assess the overall health of the labor market. Many of those indicators suggest that the labor market is strong.