It’s hard to know whether it will persist, or whether it’s a result of the vagaries of our seasonal adjustment process.1 And it’s a good example of the signal extraction problem that gives rise to learning lags in economic policymaking. An important lesson here is that, most of the time in an expansion, growth at socalled ‘potential’ is not enough.
There is a stock of unemployment that needs to be worked down. That means that an above-average flow out of unemployment back into employment is needed. And that is one reason why macro policy might need to be supportive of growth for an extended period during an expansion.