Here is a graph of the Effective Demand dtermination of the NAIRU, the natural unemployment rate.

The red dots plot the recent movement of the Unemployment rate in relation to the UT index which measures spare capacity to the effective demand limit. (quarterly data)

I used to use a linear trend line to determine the natural unemployment rate, where the plot crosses the 0% point on the x-axis. Yet the recent plot is moving like a polynomial line. The equation of the trend line shows a 6.2% for the natural unemployment rate. Yet the plot could go a bit lower, so I estimate a natural unemployment rate of 5.9% to 6.2%.

We currently have 6.2% unemployment for the 2nd quarter of 2014. And tomorrow the forecast is for a 6.1% unemployment which keeps the graph above showing that the economy is very close to the effective demand limit. The critical variable to confirm the effective demand limit is a drop in capacity utilization, which may be coming after the big drop in the Chicago PMI.

Related article...

Zumbrun, Josh. Wall Street vs. Brookings on the Decline in Unemployment, Round 1. Wall Street Journal: Real Time Economics. July 31, 2014.