Despite recent signs of a pick up, the economy is still not growing rapidly enough to drive the unemployment significantly lower. In addition, average hours worked remains well below normal levels, reflecting the relatively high share of part-time jobs in total employment. These sources of slack in the labour market can be illustrated by recalculating the standard unemployment rate measure to include this weakness in average hours worked. What that measure shows is that slack remains unusually high, which should put further downward pressure on wages.
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