Does America need more unemployment?

livemint.com:

fight against inflation, the state of America’s labour market has taken on extraordinary importance. Its health is a crucial indicator of whether the battle is being won or lost. Initially the covid-19 pandemic was to blame for many of the workforce gaps, since people were less inclined to venture out for employment.

Now, as recent data releases make clear, the economy itself is the source of the strains. Consider a wide range of measures. All point to a slight softening in the labour market over the past year.

Yet all are still, to a remarkable degree, resilient by historical standards. For every unemployed person in America, there are 1.6 jobs available, a ratio that is down a tad since mid-2022, but well in excess of the pre-pandemic norm. Since February 2020—before covid hit America—the economy has added nearly 4m jobs, putting employment above its long-term trend line.

There do not appear to be many workers left on the sidelines: some 84% of prime-age workers (aged between 25 and 54) now participate in the labour force, the most since 2002 and just a percentage point off an all-time high. From the perspective of workers, such vigour is welcome. Wage growth has been especially fast for service-sector jobs that require less education, such as construction.

That, in turn, has helped to narrow some of the income inequality which bedevils America. Less well-off parts of the population tend to benefit disproportionately from a tight labour market. The unemployment rate for black Americans hit 4.7% in April, a record low.