These data are collected by the U.S. Bureau of Labor Statistics as part of its monthly Current Population Survey. 2  Aaronson and Sullivan (2001). 2  BIS central bankers’ speeches  since then. 3 Among the many robustness analyses they performed, their models produce nearly the same trend for labor force participation as they have since 2001. 4 Depending on the details of the specification, Chicago Fed economists estimate that at the end of the second quarter of 2014, the labor force participation rate was between 1/2 and 1–1/4 percentage points below trend. Furthermore, the participation rate was as much as 3/4 of a percentage point below predictions based on its historical relationship with the unemployment rate. This disparity suggests that there likely is an extra margin of slack in labor markets beyond that indicated by the unemployment rate alone. It is interesting to dig further into these “labor force participation gaps.” Virtually all the gap during this cycle has been due to withdrawal from the labor market of workers without a college degree. By contrast, a participation gap never materialized for college graduates, even during the depths of the recession. There is no simple explanation for this striking contrast. It could be yet another symptom of long-running but difficult-to-model trends in the economy, such as job polarization and changes in social programs, which particularly impact the lower-skill work force. 5 Regardless, the divergent work behavior across education groups strikes me as an important fact and deserving of much further research attention.
Due to favourable developments in prices for goods produced in Norway compared with prices for imported goods, our terms of trade have improved. The impact of the rise in oil and  2  BIS Review 107/2007  gas prices is particularly strong, but the terms-of-trade gains for the mainland economy have also been high. The labour market and the orientation of monetary policy Developments in recent years have paved the way for strong growth in employment, and the same applies today now that the cyclical upturn is in a mature phase. The labour market is tight. There have never before been so many vacancies in relation to the number of unemployed. Unemployment has fallen sharply in the past few quarters. The rate of decline and level of unemployment are reminiscent of two previous cyclical peaks, the one in the mid-1980s and the other that started in the late-1990s and continued into this decade. Both expansions culminated in a sharp rise in wage and cost inflation. While unemployment is now very low, the current upturn with high productivity growth and low growth in real wages has, from a corporate perspective, resulted in a reduction in employees’ share of corporate earnings. Historically, however, unemployment has been high when the wage share was low. What are the factors that can explain the current situation of both low unemployment and a low wage share? Developments in unemployment and the wage share have probably been influenced by a number of positive supply-side conditions.