The US created 850,000 new jobs in June. Large. But 9 million people who would likely work now if it hadn't been for a pandemic are still sitting at home.
The economy would recover much faster if they went back to work. However, the problem is not a lack of available work.
The number of job vacancies rose to a record 9.3 million in April, and there's a good chance they rose again in May. The latest figures will be available on Wednesday.
See: Market economy calendar
So what's the problem?
"It is an individual's willingness to be available for a job," said Stephen Stanley, chief economist at Amherst Pierpont Securities.
Why companies have such great difficulty filling a record number of vacancies is a hot topic.
Many companies say that additional unemployment benefits were introduced during the pandemic, which encouraged some unemployed workers to stay at home. In some states, an unemployed person can earn almost as much, or even more, in benefits than his old job earned.
The Biden government and other skeptics of this argument say the solution is simple.
"Pay them more," the president said last week.
Many companies have done just that, but even then it's not enough. The number of workers leaving their jobs has risen to a record high. Most of them did so because they found another company desperate enough to hire workers who paid more.
But companies will only go so far. While it's easy for companies to raise or lower prices for customers based on the cost of their own supplies, they refuse to lower wages as it harms employee morale.
"You can't take away wages," said Timothy Fiore, chairman of the Institute for Supply Management's manufacturing survey.
That's why companies don't want to throw their costs out of balance when they mention a temporary labor shortage. Many operate in very competitive industries and cannot simply pass higher labor costs on to customers.
In any case, higher wages or the end of unemployment benefits will hardly solve the labor market puzzle.
A survey of 5,000 adults shows that ongoing fear of the coronavirus could be the biggest barrier to getting back into work.
Read: This is the main reason unemployed Americans are not looking for work
Another large proportion of the unemployed state that they still look after children or older relatives because they have few other options.
Still others say they have enough financial cushion to find a better job or to return to work at a later date. Massive government financial incentives for the economy have given them more leeway.
Most economists assume that the labor market will normalize again in autumn as soon as schools, daycare centers and nursing homes are fully open again.
People will also feel more comfortable returning to work as more Americans are vaccinated and Covid cases continue to decline.
"There are still many unanswered questions in the labor market, particularly the outlook for the labor supply," said Neil Dutta, director of economics at Renaissance Macro Research. “We'll have to wait until autumn to get a better one
Sense for it. "