A diminished US workforce could lead Fed to keep rates high

By CHRISTOPHER RUGABER
AP Economics Writer

WASHINGTON (AP) — America’s employers are posting more job openings than they did before the pandemic struck 2½ years ago. Problem is, there aren’t enough applicants. The labor force is smaller than when the pandemic struck. The reasons vary — an unexpected wave of retirements, a drop in legal immigration, the loss of workers to COVID-19 deaths and illnesses. The result, though, is that employers are having to compete for a smaller pool of workers and to offer steadily higher pay to attract them. It’s a trend that economists say could fuel wage growth and high inflation well into 2023. As a result, the Fed is expected Wednesday to raise its benchmark short-term rate for a seventh time this year.