US economy hits unchartered territory: full employment -- so why does it feel so bad?

**Christy Strawser** (0:01)
This is On Deadline, where the biggest stories, the smartest journalists, and the conversations that matter come together from Audacy news stations across the country.
When news breaks, the story doesn't stop there. I'm Christy Strawser. Let's get started. We haven't talked about the economy in a while, but it continues to be, well, it's strange. Here's Dave Cohen in New Orleans.

**Dave Cohen** (0:25)
Never since 1969 have so few people been filing for unemployment claims. Why?
Is it that fewer and fewer people need a job? Or is there something else going on? We wanted to get the chief economist and managing director at High Frequency Economics in here to explain this to us. So, Karl Weinberg, why is it that unemployment claims are the lowest since the 1960s?

**Karl Weinberg** (0:49)
The economy is in a place that it never really normally gets to, which is called full employment, where everybody who wants a job has a job. And we see that in the unemployment rate, which is the statistic that most people look at. It's around 4%, 4.3% to be accurate, but very, very low by historical standards, about as low as it's ever been.
So when you get to the situation, the economy can't grow anymore because people aren't available to be put to work to make more GDP, to make more economic output. And that's where we are right now. Companies are finding it hard to find workers to do jobs that need to be done in order to make them grow faster. So they can't grow as fast. And they're holding on tight to the workers that they have. So there are very, very few layoffs. That's what this thing is all about.

**Dave Cohen** (1:41)
I see a lot of theories, though, that there are still a whole lot of people out there who don't have jobs, but they either don't want them or they've given up looking for them. So this is the actual number of people who are filing for unemployment benefits.
Is there something else going on, as these theories would suggest, that there are still a lot more people who don't have a job, or don't have a traditional job, or don't have a full-time job, but they're okay with that?

**Karl Weinberg** (2:10)
Well, the labor force participation rate right now is extremely high, and it's not going up, which is to say we're not drawing a lot of people out of idleness into workingness. A lot of those people are people who are retired, and to be sure, we've seen a lot of retirees coming back into the workforce. A lot of these people are people who previously were stay-at-home people, housewives, students, looking, then become looking for part-time jobs and so on, who are attracted into the job market by higher wages. But there aren't a lot of them, and what we're seeing is that the labor force and the working-age population is actually going down right now because of our demographics. And as a result, it's just really hard to find workers. There aren't that many idle people out there.

**Dave Cohen** (2:59)
So what are companies doing if they are having so much trouble finding people who want to work or who want to leave their current jobs to come work for them with such a shallow labor pool and so few people available to attract? What do you do as a company?

**Karl Weinberg** (3:18)
Well, for sure, one thing they are doing is complaining. And we see that in surveys, like the Federal Reserve's Beige Book. We see that in the National Federation of Independent Businesses. We see that in the National Association of Home Builders. They are all complaining they can't find workers. They have empty jobs and they don't have enough qualified people to fill them. The other thing they are doing is they are just making people work harder. In economic terms, it's called increasing productivity. Putting on an extra hour on the shift or giving somebody more tests to do.
Or, best way of all, adding technology to make the people who are there more effective. So you can produce more GDP, more output with the same number of people. And productivity gains is the way that we will grow in this situation until something happens and we have the recession and then we have idle people, and then it's a whole new ballpark all over again.

**Dave Cohen** (4:13)
So it really is that model of we have to find ways to do more with less.

**Karl Weinberg** (4:19)
And that's one of the first rules of economics. Productivity is the secret sauce that makes an economy grow faster. And when you're at full employment, the only way an economy can grow is by increasing the productivity of the people who are working already.