<p>Unemployment is the wrong measure to look at. At least in the US, a lot of people have left the labor force altogether. As a result, the unemployment rate is very low as most people who are willing to work indeed already have a job. The problem are those not willing to work. The labor force participation rate is still way down:</p>
<p><a href="https://i.sstatic.net/fgSCT.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/fgSCT.png" alt="enter image description here" /></a></p>
<p>Consequently, the number of employees is still well below the pre-crisis trend:</p>
<p><a href="https://i.sstatic.net/SUYGc.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/SUYGc.png" alt="enter image description here" /></a></p>

CC BY-SA 4.0
2022-05-10T21:49:30.597Z
Your second chart suggests employee numbers are close to pre-Covid levels.  Another FRED chart suggests [US real GDP per capita](https://fred.stlouisfed.org/series/A939RX0Q048SBEA) is above pre-Covid levels, so production is not lower
Henry
CC BY-SA 4.0
2022-05-11T08:05:49.987Z
It's all about the relevant counterfactual. GDP per capita can be higher due to higher productivity and more capital used in production. It would be even higher if a higher share of the population were working as before Covid. So it's no contradiction to have tight labor markets and high production.
jpfeifer
CC BY-SA 4.0
2022-05-10T11:05:46.123Z
2022-05-10T11:05:46.123Z
jpfeifer
<p>You make several general claims that may or may not be true. Even if they are, there seems to be no logical contradiction.</p>
<hr />
<ol>
<li></li>
</ol>
<blockquote>
<p>There is definite scarcity.</p>
</blockquote>
<p>...of what?</p>
<p>2.</p>
<blockquote>
<p>Production of practically every major commodity and common durable goods is down.</p>
</blockquote>
<p>This sounds overly general, and please back it up with a source. Scarcity is possible even if production is up in the US, as it is not a closed economy.</p>
<ol start="3">
<li><p>Since there are several sectors in the US economy, it is possible that unemployment is low but some sectors have lower number of workers than usual, e.g., if a lot of people became software engineers or baristas, you would have fewer masons.</p>
</li>
<li><p>Composition effect: it is possible that some foreign citizens, who usually suffer higher unemployment than US citizens, have returned to their country during the pandemic (or other reasons). This would decrease both employment and the unemployment rate.</p>
</li>
</ol>

CC BY-SA 4.0
2022-05-10T04:57:00.243Z
2022-05-10T04:57:00.243Z
Giskard
<p>I don't really understand current macro economics. There is definite scarcity. Production of practically every major commodity and common durable goods is down. This is causing prices to increase, as one might expect.</p>
<p>However, at the same time, it seems that employment is relatively high. It is difficult to hire people in the United States at any price, especially for labor jobs. I have a job listing for a mason paying over $200,000 and have gotten ZERO resumes, not even the usual unqualified people.</p>
<p>So, how can everybody be working hard, but production keeps going lower?</p>

CC BY-SA 4.0
2022-05-10T04:59:11.100Z
"*I have a job listing for a mason paying over $200,000 and have gotten ZERO resumes, not even the usual unqualified people.*" This is anecdotal, and also light on the details. Is it a yearly salary offer? (If it is , you are doing something wrong with the listing.) Is it an offer for a 1-year-long 6-men job? Either way, it should not be part of a serious question, as it is anecdotal.
Giskard
<macroeconomics><unemployment><united-states>
How can employment be up but production is down?
Lassie Fair
# How can employment be up but production is down?

(Asked by: username_0 on 2022-05-10)

I don't really understand current macro economics. There is definite scarcity. Production of practically every major commodity and common durable goods is down. This is causing prices to increase, as one might expect.

However, at the same time, it seems that employment is relatively high. It is difficult to hire people in the United States at any price, especially for labor jobs. I have a job listing for a mason paying over $200,000 and have gotten ZERO resumes, not even the usual unqualified people.

So, how can everybody be working hard, but production keeps going lower?

**Tags:** macroeconomics, unemployment, united-states

> **Comments:**
> **username_1**: "*I have a job listing for a mason paying over $200,000 and have gotten ZERO resumes, not even the usual unqualified people.*" This is anecdotal, and also light on the details. Is it a yearly salary offer? (If it is , you are doing something wrong with the listing.) Is it an offer for a 1-year-long 6-men job? Either way, it should not be part of a serious question, as it is anecdotal.  

---

## 2 answers

### Answer by username_2 on 2022-05-10. Score: 3

Unemployment is the wrong measure to look at. At least in the US, a lot of people have left the labor force altogether. As a result, the unemployment rate is very low as most people who are willing to work indeed already have a job. The problem are those not willing to work. The labor force participation rate is still way down:

[![enter image description here](https://i.sstatic.net/fgSCT.png)](https://i.sstatic.net/fgSCT.png)

Consequently, the number of employees is still well below the pre-crisis trend:

[![enter image description here](https://i.sstatic.net/SUYGc.png)](https://i.sstatic.net/SUYGc.png)

> **Comments:**
> **username_3**: Your second chart suggests employee numbers are close to pre-Covid levels.  Another FRED chart suggests [US real GDP per capita](https://fred.stlouisfed.org/series/A939RX0Q048SBEA) is above pre-Covid levels, so production is not lower  
> **username_2**: It's all about the relevant counterfactual. GDP per capita can be higher due to higher productivity and more capital used in production. It would be even higher if a higher share of the population were working as before Covid. So it's no contradiction to have tight labor markets and high production.  

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### Answer by username_1 on 2022-05-10. Score: 0

You make several general claims that may or may not be true. Even if they are, there seems to be no logical contradiction.

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> There is definite scarcity.

...of what?

2.

> Production of practically every major commodity and common durable goods is down.

This sounds overly general, and please back it up with a source. Scarcity is possible even if production is up in the US, as it is not a closed economy.

3. Since there are several sectors in the US economy, it is possible that unemployment is low but some sectors have lower number of workers than usual, e.g., if a lot of people became software engineers or baristas, you would have fewer masons.
4. Composition effect: it is possible that some foreign citizens, who usually suffer higher unemployment than US citizens, have returned to their country during the pandemic (or other reasons). This would decrease both employment and the unemployment rate.


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