A "benchmark" provides a standard or point of reference to help judge the level of similar things. For example, is a baseball player with a. In , the batting average for professional Major League Baseball players was. Because the natural rate of unemployment defines "full employment," it is often used as an unemployment benchmark. The current estimate of the natural rate of unemployment is about 5 percent, 5 and the current unemployment rate using the U-3 measure; see the boxed insert is also 5 percent Figure 2.
Based on these two measures, many economists suggest that labor markets are now fairly healthy. Federal Reserve Bank of St. Louis President James Bullard recently commented that "U. Alternative Measures of Labor Underutilization. The Q4 estimated natural rate of unemployment red line was 5. Thinking again about baseball, in assessing a baseball player, team managers likely consider statistics beyond batting average alone.
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For example, considering the on-base percentage and slugging percentage in addition to batting average might provide a more complete assessment of a player's batting skills. Likewise, there are other useful indicators of the health of the labor market. The labor force participation rate measures the labor force as a percentage of the civilian noninstitutional population. The labor force participation rate as of December was Economists explain that the increase and more recent decrease in the labor force participation rate are largely due to demographic changes.
They attribute the increase in the labor force participation rate from to largely to two historic shifts: women entering the labor force and the baby boom generation those born between and maturing and entering the labor force.
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They attribute the recent decline to demographics again: Baby boomers currently between 52 and 70 years old leaving the labor force for retirement have reduced the labor force participation rate for both men and women. NOTE: The labor force participation rate rose from In December it was Louis, Federal Reserve Bank of St. Economists disagree, however, about how much of the change in labor force participation is due to demographics alone and how much is due to cyclical business cycle factors.
Economists who use a more cyclical explanation perceive the decrease in the labor force participation rate as a "bad omen" for the broader economy. For example, having a large number of discouraged workers who are not counted as part of the labor force would cause the labor force participation rate to fall and keep the unemployment rate lower than it would otherwise be. It peaked at 10 percent after the Great Recession. In December , the U-6 unemployment rate blue line was 9. It peaked at Other economists find the decrease in the labor force participation rate fairly predictable based on demographics and cyclical factors to be relatively small.
James Bullard is among those who think demographics have driven most of the recent decline in labor force participation. As such, he argues that most of the decline in the unemployment rate can be understood as an improving labor market rather than workers dropping out of the labor force because they can't find jobs. The standard unemployment rate U-3 is an important measure of the health of national labor market conditions. Recent unemployment data indicate that the U. However, many observers doubt that the unemployment rate fully reflects the reality of underemployed and discouraged workers—both of whom are not counted as unemployed.
They often refer to the downward trend in the labor market participation rate as an indication of labor market weakness. However, taken in the context of the demographic shift, the current low unemployment rate is likely an indication of a strong labor market. Monetary Policy. Louis Review , First Quarter , 96 1 , pp.
The views expressed are those of the author s and do not necessarily reflect official positions of the Federal Reserve Bank of St.
Louis or the Federal Reserve System. Cyclical unemployment: Unemployment associated with recessions in the business cycle. Discouraged worker: Someone who is not working and is not looking for work because of a belief that there are no jobs available to him or her. Frictional unemployment: Unemployment that results when people are new to the job market, including recent graduates, or are transitioning from one job to another.
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Labor force: The total number of workers, including both the employed and the unemployed. Labor force participation rate: The percentage of the working-age population that is in the labor force. Natural rate of unemployment: The rate of unemployment that does not contain cyclical unemployment.
Recession: A period of declining real income and rising unemployment; significant decline in general economic activity extending over a period of time. Structural unemployment: Long-term joblessness caused by a mismatch in the skills held by those looking for work and the skills demanded by those seeking workers. Underemployed: Wanting a full-time job but having only a part-time job; being overqualified for a job and receiving less pay than would be earned at a job requiring a higher skill level.
Unemployed: People at least 16 years old who are without jobs and actively seeking work. Stay current with brief essays, scholarly articles, data news, and other information about the economy from the Research Division of the St. Ecological factors - definition of the wider ecological system of which the organisation is a part and consideration of how the organisation interacts with it.
Legislative requirements - originally included under 'political', relevant legislation now requires a heading of its own. Industry analysis - a review of the attractiveness of the industry of which the organisation forms a part. Organisations that do analyses regularly and systematically often spot trends before others thus providing competitive advantage.
Decision-making is more natural to certain personalities, so these people should focus more on improving the quality of their decisions. People that are less natural decision-makers are often able to make quality assessments, but then they need to be more decisive in acting upon the assessments made. PESTELI is a good exercise for marketing people, and is good for encouraging a business development, market orientated outlook among all staff. If you want to use PESTELI with staff who are not naturally externally focused you can have them do some research and preparation in advance of the exercise.
It all depends how thorough you need to be. It is a good subject for workshop sessions, as undertaking this activity with only one perspective i. For most situations the original PEST analysis model arguably covers all of the 'additional' factors within the original four main sections. For example, Ecological or Environmental factors can be positioned under any or all of the four main PEST headings, depending on their effect. Legislative factors would normally be covered under the Political heading since they will generally be politically motivated. Demographics usually are an aspect of the larger Social issue.
Industry Analysis is effectively covered under the Economic heading. Thus we can often see these 'additional' factors as 'sub-items' or perspectives within the four main sections. Examples of these have been added to Table 1. Keeping to four fundamental perspectives also imposes a discipline of considering strategic context and effect. Many of these potential 'additional' factors ethical, legislative, environmental for example will commonly be contributory causes which act on one or some of the main four headings, rather than be big strategic factors in their own right.
The shape and simplicity of a four-part model is also somehow more strategically appealing and easier to manipulate and convey. The prompts are examples of discussion points, and obviously can be altered depending on the subject of the PEST ELI analysis, and how you want to use it. The following factors may help as a starting point for brainstorming but make sure you include other factors that may be appropriate to your situation :.
Ecological factors — Air quality, transportation, parking, pollution discharge, water quality, waste management, land use, coastal resources etc. Legislative requirements — Primary and secondary legislation in relation to Health Bills e. Consider changes to treatment and public attitudes as well as government changes. In reviewing the data drawn from undertaking a PESTELI analysis it will be important to assess whether there are any disproportionate impacts on particular groups of people, especially those who are vulnerable.
Proposals, organisational missions and policy development should not widen inequalities, but actively seek to reduce them. Part of the decision-making that follows the analysis will be to consider what could be done to counterbalance the negative impacts for groups which may get less health benefit from positive proposals or may be adversely affected by proposals with a negative impact on health. Skip to main content. Create new account Request new password. You are here 5b - Understanding Organisations, their Functions and Structure.
Advantages and disadvantages of using a PEST ELI analysis Advantages Simple framework Facilitates an understanding of the wider business environment Encourages the development of external and strategic thinking Can enable an organisation to anticipate future business threats and take action to avoid or minimise their impact Can enable an organisation to spot business opportunities and exploit them fully By taking advantage of change, you are much more likely to be successful than if your activities oppose it Avoids taking action that is doomed to failure from the outset, for reasons beyond your control.