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Federal Reserve Bank of San Francisco
FRBSF Economic Letter
Uncertainty and the slow labor market recovery
Sylvain Leduc
Zheng Liu

Since 2009, U.S. job vacancies have increased but unemployment has fallen more slowly than in past recoveries. There is evidence that heightened uncertainty about economic policy has been an important factor behind this change. Increased uncertainty may discourage businesses from filling vacancies, thereby raising unemployment. An estimate indicates that, without policy uncertainty, the unemployment rate in late 2012 would have been close to 6.5%, 1.3 percentage points lower than the actual rate.

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Sylvain Leduc & Zheng Liu, "Uncertainty and the slow labor market recovery" , Federal Reserve Bank of San Francisco, FRBSF Economic Letter, number 21, 2013.
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Keywords: Labor market ; Economic policy
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