The unemployment rate is now at 3.7%. That's so low that Maurice Kugler at George Mason University says it might be creating a separate set of problems.
"So this possibility of the unemployment rate being so low that it's below the natural rate of unemployment creates the prospect of a wage-price spiral, which can exacerbate inflation," Kugler says, "which is right now the main challenge in terms of macroeconomic policy."
To be considered as unemployed, people have to be actively looking for work. But Leslie Stratton at Virginia Commonwealth University says the labor force participation rate was going down before the pandemic, and now even more people are joining the Great Resignation.
"There are fewer people out there interested in working," Stratton notes. "The population is aging. More people are retiring. A bunch of people did retire as a response to Covid. Will they reenter? Don't know for sure. We see very different figures coming from different states even in terms of what's going on with the labor force participation rate."
Virginia's labor-force participation rate is currently at 64%, slightly higher than the national average, which is 62%.
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.
