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Informing the public about the Federal Reserve
What is the lowest level of unemployment that the U.S. economy can sustain?
Even in good times, a healthy, dynamic economy will have at least some unemployment as workers switch jobs, and as new workers enter the labor market and other workers leave it. The lowest level of unemployment that the economy can sustain is difficult to determine and has probably changed over time due to changes in the composition of the labor force, and changes in how employers search for workers and how workers search for jobs.
As of June 22, 2011, Federal Reserve policymakers estimate that, with appropriate monetary policy and without unexpected shocks to the economy, the unemployment rate in the longer run (that is, perhaps in the next five to six years) will decline to a range between 5 and 6 percent.
Though a variety of factors influence the level of unemployment in the economy, the Federal Reserve makes monetary policy decisions that aim to foster the lowest level of unemployment that is consistent with stable prices.
