The Paradox of Employment in the U.S.

Maintaining low unemployment without initiating painful inflation is difficult, and it's hard to quantify maximum employment. The Federal Reserve cannot directly control the unemployment rate, but it can indirectly influence it by adjusting interest rates in response to inflation. Existing measures of employment often do not account for certain groups of people, such as discouraged workers. If companies find it easier to fill vacancies without bidding up wages, it may be possible to sustain low unemployment without inflation growing.