All told, only about half of the collapse in private payroll employment in 2008 and 2009 has been reversed. A critical question for monetary policy is the extent to which these numbers reflect a shortfall from full employment versus a rise in structural unemployment.
Annual inflation fell from 6.5 percent in 2008 to 3.6 percent in 2009 and since then its average has been 3.9 percent. Furthermore, after hitting 3 percent in March of 2011, annual inflation has remained substantially close to, albeit somewhat above, the permanent target.