The U.S. economy continued to expand from the longest and deepest drop in economic activity since the Great Depression. During the 23 quarters following the end of the Great Recession, the annualized rate of real gross domestic product (GDP) growth was 2.2% - near what is considered the long-term trend rate of growth for the U.S. economy. This GDP growth rate is very disappointing, since typically, the pace of economic recovery is quite sharp following a deep recession.
While the economy's expansion has lasted nearly six years, signs of slack still remain in the economy. The unemployment rate in May 2015 was 5.5% - close to what is considered the natural rate of unemployment (i.e., the rate that would prevail in an economy making full use of its productive resources). However, several other labor market indicators suggest that slack remains in the employment market. First, the labor force participation rate has fallen over the past several years below what demographic changes of an aging population can explain. Second, the percentage of workers who are working at part-time jobs but desire full-time employment is significantly above what it has historically averaged. And third, the pool of unemployed workers who have been out of work for more than six months remains at levels that are exceptionally high - higher than anything seen since the Great Depression.
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