Labor market shortage hitting US economy, job market is only temporary

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Opinion | Businesses are struggling to find workers and experts are raising the alarm over a 'labor shortage.' But there are clear reasons to think the job crunch is only a short-term problem. By Neil Dutta at RenMacLLC

Schools are likely to return to full in-person instruction in the fall.attachment of parents to the workforce

the boosted unemployment benefits early and the program itself is over the summer. So, to the extent this is a big constraint, it will be fading in the months ahead. I think this easing of labor supply constraints has a few important implications, particularly for the Fed. More importantly, what exactly is the Fed supposed to do about labor constraints? Lift rates and cool demand for labor? In the same way that much of the rise in consumer prices has been concentrated in items related to supply chain disruptions or the economic reopening, the Fed will likely view the recent supply side pressures in the labor market as temporary. Thus, the Fed's best strategy is to do nothing.

 

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RenMacLLC A simple question: did they try to actually pay the workers?

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