Unemployment Gap

Actual unemployment rate minus the CBO natural rate (NROU) — the cyclical component of unemployment. Negative = labor market above full employment (wage pressure); positive = slack exists (room for Fed to cut). Peaked at +12pp during COVID, fell to -0.8pp in 2022–23, now normalising.

This indicator is computed by MacroLab from two FRED series: UNRATE minus NROU. Both input series are sourced from the Federal Reserve Economic Data (FRED) database.