Any assessment of the likelihood and characteristics of a soft landing should take into account the situation in the labor market currently and the likely dynamics in the labor market going forward. Modern labor market models centered around the Beveridge curve are a useful tool in this assessment

After rising to 10 percent in the wake of the Great Recession, the unemployment rate is now approaching a level that many observers--including the Congressional Budget Office, as shown in Figure 1--associate with the natural rate of unemployment