As borrowing costs surge and growth slows, unemployment rates are not rising. Instead, companies across developed economies are complaining of chronic worker shortages. A persistent mismatch between demand for new hires and the supply of workers is supporting wages and shielding consumers from slowdowns just when central banks need fading demand to cool inflation.
Robust labour markets are defying central bankers’ efforts to tamp down inflation and economists’ predictions that recession is just around the corner.
The strong job market is good for workers. But it’s bad for inflation, signalling to the world’s central banks, which are raising interest rates at the most aggressive pace in decades, that they can’t ease up.
