The US labor market is running hot…or not? - Jason Furman and Willie Powell

May 7, 2021, Opinion: "The United States added 266,000 jobs in April while the unemployment rate rose slightly to 6.1 percent with the realistic unemployment rate, which adjusts for misclassification and the unusual decline in labor force participation, falling to 7.6 percent as more people entered the labor market.  The economy was still 10 million jobs short of its pre-pandemic trend in April with the employment rate down 3.2 percentage points since February 2020. Even though the pace of hiring was disappointing in April, the labor market has still been behaving as if there was relatively little or even no slack left: Openings were at record levels, quits were near record levels in February, composition-adjusted wages were growing at the same pace they did in the relatively tight 2019 labor market with the largest wage gains for the lowest-wage workers, wages not adjusted for changing composition rose 0.7 percent in April, and average weekly hours remain very high."

HKS Authors - Jason Furman and Willie Powell