May 2022 / VIDEO
A Labor Demand and Supply Imbalance Challenges the Fed
Labor demand has considerably outpaced supply, but the job market tightness can ease if more workers join the labor market.
- U.S. labor demand has considerably outpaced the supply of workers during the recovery from the pandemic-induced recession in 2020.
- This labor market tightness has contributed to upward pressure on wages and made the Fed’s task of taming inflation more difficult.
- The labor market may not be as tight as the headline unemployment rate makes it appear, as more workers can join the job market.
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