Closing The Gap

http://www.economist.com/news/finance-and-economics/21596529-americas-labour-market-has-suffered-permanent-harm-closing-gap

                  This article talks about how the American Labor market might have gone through permanent damage, regarding the labor supply. The chairman of the Federal reserve, Janet Yellen concluded that she would consider more than just the unemployment rate to consider whether or not the labor market is complete. She further added that the labor market is currently "far from complete".
                 The article further shows that from 2007 till 2009 the proportion of people with jobs declined from 63% to 59%. This just means that the output gap has not closed at all. However, if the unemployment rate of those years is looked at, it is at the "natural rate" of 5.5% suggesting that the output gap has disappeared and finally looking at those unemployed in the last six months of that time shows that the output gap has closed up completely. These are three different ways Nomura Securities, a bank used to calculate three different labor market indicators.
                  The article also suggests that the output gap might be overstated for the Fed's purposes mainly because of the fact that people unemployed for a long time do not get much attention from recruiters even though they might be actively searching for a job.