Labor Market Conditions and Inflation Overview

These flashcards cover key vocabulary related to labor market conditions, types of unemployment, and inflation definitions and measures.

Nonfarm Payroll Employment

Measures jobs created or lost outside of the agricultural sector in the past month.

Unemployment Rate

Percentage of the labor force actively seeking but not finding work.

Job Openings and Labor Turnover Survey (JOLTS)

Reflects labor market dynamics, examining job vacancies and changes in industries.

Weekly Initial Jobless Claims Report

Measures first-time unemployment benefit claims; often indicates economic distress.

Discouraged Workers

Individuals who have given up searching for work and are not counted as unemployed.

Frictional Unemployment

Temporary unemployment occurring when workers are between jobs or seeking better job matches.

Structural Unemployment

Unemployment resulting from technological changes that make some skills obsolete.

Cyclical Unemployment

Unemployment correlated with the business cycle, increasing during recessions.

GDP Gap

Difference between potential real GDP and actual real GDP due to cyclical unemployment.

Inflation

A sustained increase in the average level of prices, decreasing the purchasing power of currency.

Consumer Price Index (CPI)

Measures prices of a select bundle of goods and services purchased by urban households.

Creeping Inflation

A slow and steady increase in the price level over time.

Hyperinflation

An extremely rapid increase in the price level, leading to a loss of currency value.

Deflation

A sustained decrease in the average level of prices over time, increasing the purchasing power of money.

Nominal Interest Rates

Stated interest rates not adjusted for inflation.

Real Interest Rates

Interest rates adjusted for the effects of inflation.

Fisher Equation

The relationship among nominal interest rates, real interest rates, and inflation rates.

Demand-pull Inflation

Inflation caused by an increase in aggregate demand.

Cost-push Inflation

Inflation caused by a decrease in aggregate supply due to rising resource prices.

Shrinkflation

Occurs when prices remain the same but the quantity of the product declines.

Shadow Inflation

Occurs when prices stay the same but the quality of products declines.