In fact, employment growth last year was less than what would be consistent with growth in the economy’s potential.4 You can get a better sense of how important this is when you take a structural approach to measuring the output gap.
We used a growth-accounting framework to help us estimate the output gap and the labour market gap.5 For those who are interested in learning more, we just posted a paper on this on our website.6 What this method tells us is quite important.