Both the natural rate of unemployment and labor force participation initially appeared to suffer crisis-related damage. But more recent data are a bit more encouraging. The natural rate of unemployment reflects the matching of characteristics that employers are seeking with those of the unemployed.
With the dramatic labor market dislocations of the crisis, it was not surprising to see measures of matching efficiency deteriorate, and many  4  See Eugenio Pinto and Stacey Tevlin (2014), “Perspectives on the Recent Weakness in Investment,” FEDS Notes (Washington: Board of Governors of the Federal Reserve System, November 21).