9.3.1—Full employment

Full employment is the level of employment consistent with the economy’s normal or sustainable unemployment, so frictional and some structural unemployment may remain.

The term is a benchmark, not a claim that every person has a job immediately. It depends on definitions, labour-market matching, participation and the time horizon.

A worker changing jobs may be temporarily unemployed while the economy is at full employment; a recession that leaves many workers idle creates a negative output gap below the benchmark.

Full employment is not 100% employment, and a low unemployment rate can still hide inactivity, underemployment or poor job quality.