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According to Andrew Levin [pdf], the current employment gap of 3 percentage points is roughly three times the oft-cited difference between the official unemployment rate and the so-called natural rate of unemployment.

Levin defines the overall employment gap as the the deviation of actual employment from its maximum sustainable level. It is the sum of three components: (a) the unemployment gap, the deviation between actual unemployment and its longer-run normal rate; (b) the participation gap, the deviation between the actual labor force and the level that would solely reflect demographic and structural factors; and (c) the underemployment gap, the extent of involuntary part-time work (measured in full-time equivalent jobs) relative to its longer-run normal incidence.

Those who can’t find a job, have given up looking for a job, and are working a part-time job when they’d prefer to be working full-time watch with disbelief as the inflation hawks push the Fed to raise interest rates and private employers say they’re doing all they can to hire available workers.

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