The US labor market has structural problems that are more significant than a headline unemployment rate nearing 5% would suggest.  The skill mis-match narrative is visible in the data. The ratio of hires to job openings has collapsed.

Surveys also continue flag “quality of labor” as a major problem for businesses.

Older workers’ share of total unemployed continues to trend higher and has surged after each previous recession, consistent with a skill mis-match problem for older workers who need to adapt to the new economy.

A college degree is also no longer a guarantee of employment. The drawdown in the participation rate for bachelor degree holders is higher than the least educated workers. This again speaks to the mis-match in skills asthe traditional education system becomes less suited to produce workers for the modern economy.

Employment inequality remains a key theme for the Fed. White employment outcomes remain significantly better than ethnic minorities. Ethnic minority unemployment rates are further from their lows. The employment to population ratio has also fallen further ethnic minorities vs white workers.

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