Recent labor statistics also show a continued decline in regular employment. These data suggest persistent pressure for labor market adjustment and continued severe conditions for employment and income. Looking closely at the latest statistics, it should be noted that we have begun to observe some signs of favorable changes in the labor market.
A simple concept of the neutral, or natural, rate of interest over the long term is the one derived from models of long term economic growth in which the equilibrium real interest rate is determined by productivity growth, demographics and saving preferences. Estimates of this concept of the natural real interest rate have ranged between 2 and 3 per cent.