The U.S. Job Market: A Recovery Where Underemployment and Labour Shortage Coexist

The pandemic hit the U.S. economy hard, but several government measures and the easing of health restrictions have boosted the recovery and real GDP has now surpassed its pre-pandemic level. Unfortunately, that was not the case for the labour market, which is still short several million jobs. Underemployment is rampant in the United States. At the same time, businesses are making it clear that they are having trouble filling all currently vacant positions. This Economic Viewpoint will try to make sense of this paradox which is clouding not only economic conditions but also the prospects for the Federal Reserve (Fed) and public administrations.