Many economists would welcome a small rise in the unemployment rate. They are troubled by the rate’s swift decline from its pandemic peak because it partly reflects a lack of job seekers—effectively limiting the amount of fuel in the economy’s engine. The Labor Department’s official unemployment rate—the most well-known gauge of the labor market’s health—counts as unemployed only those who aren’t working but are actively seeking a job. That leaves out millions who stopped working and looking for work since the coronavirus hit the economy in early 2020, leaving many businesses struggling to hire.
Source: WSJ