This outlook for the labor market also reflects my view that the structural, or longer-run, rate of unemployment that is, the unemployment rate consistent with stable inflation over the longer run —may be somewhat lower than I would have thought several years ago.
What this means is that, even with today’s very low unemployment rate, the labor market might not be as tight and inflationary pressures not as strong as I once would have thought. I am certainly not alone in this thinking. Over the past several years, most FOMC participants have been reducing their individual estimates of the longer-run level of the unemployment rate.