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America's capacity utilisation, for example, hit historically high levels earlier this year, and its jobless rate (5.6% in August) has fallen below most estimates of the natural rate of unemployment—the rate below which inflation has taken off in the past.

I don't understand the sentence after the dash mark. First, does the rate refer to jobless rate or the natural rate of unemployment? Second, I don't understand the meaning of the last sentence neither in the context of jobless rate nor the natural rate of unemployment. Is the author using the subjunctive mood? It would be nice if someone could explain or rewrite the last sentence for me.

  • I don't see anything wrong with the existing phrasing. It assumes there's such a thing as a "natural" level of unemployment, and strongly implies that inflation is a direct consequence of the jobless/unemployment rate being less than that. Which may be a questionable assertion, but it's perfectly well expressed. – FumbleFingers Jan 29 '16 at 15:38
  • @FumbleFingers Maybe it's well expressed, but the reality is that I do not understand it properly. What is the "which" imply in this sentence? – Rowan Jan 29 '16 at 15:44
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    @Rown: That which refers to the [natural] rate [of unemployment]. The text after the dash is effectively an embedded statement implicitly "defining" that rate - in the past, inflation has risen when the current rate is less than the "natural" rate. I think questions like this belong on English Language Learners – FumbleFingers Jan 29 '16 at 16:06
  • @FumbleFingers You are right. Actually, I didn't know there is a Learner version of English Language. – Rowan Jan 29 '16 at 16:09
  • You and half the people who ask questions here! :) You'll nearly always find someone on ELU willing to post "the answer" to questions like this, but I think you're more likely to get a useful explanation (that will help you with related usages in the future) on ELL. It's really a matter of whether what you want to know is What does this exact text mean?, or Why is this text phrased the way it is? – FumbleFingers Jan 29 '16 at 16:42
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The Rate refers to the natural unemployment rate.

The second and third clauses of the sentence could be written more clearly like this, at the cost of added wordiness:

America's jobless rate has fallen below most estimates of the natural rate of unemployment. The natural rate of unempoyment is the rate below which inflation has taken off in the past.

The implication is that inflation is likely to rise, because inflation has risen before when the unemployment rate was this low.

  • what is the meaning of "which" ? – Rowan Jan 29 '16 at 15:46
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    Inflation has taken off In the past below which rate? The natural rate. Or: Which rate has the jobless rate been below when inflation has taken off? The natural rate. – jejorda2 Jan 29 '16 at 15:51

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