LOS ANGELES, April 30 (Reuters) - High U.S. unemployment does not signal a widening gap between employer needs and worker skills, according to research published Monday by the Federal Reserve Bank of San Francisco, suggesting the U.S. central bank's super-easy monetary policy poses little imminent danger of sparking inflation.
Unemployment registered 8.2 percent in March, down sharply from last summer but still much higher than the 5.5 percent that has historically been equated with full employment.
That's despite more than three years of near-zero interest rates and two rounds of bond buying by the Fed to encourage growth and employment.
Some economists and Fed policymakers, notably Minneapolis Fed President Narayana Kocherlakota, believe structural factors like skills mismatch are boosting the unemployment rate.
If the lofty jobless rate reflects employers' difficulty in finding suitably skilled workers, they warn, wages could start to rise sooner than might otherwise be expected, forcing the Fed to raise interest rates to head off inflation.
But if, as the San Francisco Fed paper published Monday suggests, skills mismatch is only a small and transitory part of the equation, a rise in inflation is less likely.
"Skill mismatches can affect how fast employment can grow and the rate of unemployment that the economy can sustain without igniting inflation," David Neumark, a University of California, Irvine professor and visiting scholar at the San Francisco Fed, and San Francisco Fed research advisor Rob Valletta, wrote in the latest San Francisco Fed Economic Letter.
A review of research presented at a recent San Francisco Fed conference shows that skill mismatches have contributed only minimally to the overall unemployment rate, and that any gaps that have developed are likely to narrow as the recovery takes hold, they wrote.
"Concerns about growing skill mismatches may be overblown," they concluded.
Still, such concerns persist.
On Friday, Barclays economist Cooper Howes noted a government report showing a 0.5 percent quarterly increase in wages.
"We would expect to see even weaker wage inflation if there were still significant labor market slack," he wrote. "This level of wage inflation is consistent with our view that the natural rate of unemployment, or NAIRU, has risen over the past few years due to such factors as skills mismatch and the high level of long-term unemployment."
Support HuffPost
Our 2024 Coverage Needs You
Your Loyalty Means The World To Us
At HuffPost, we believe that everyone needs high-quality journalism, but we understand that not everyone can afford to pay for expensive news subscriptions. That is why we are committed to providing deeply reported, carefully fact-checked news that is freely accessible to everyone.
Whether you come to HuffPost for updates on the 2024 presidential race, hard-hitting investigations into critical issues facing our country today, or trending stories that make you laugh, we appreciate you. The truth is, news costs money to produce, and we are proud that we have never put our stories behind an expensive paywall.
Would you join us to help keep our stories free for all? Your contribution of as little as $2 will go a long way.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. Would you consider becoming a regular HuffPost contributor?
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. If circumstances have changed since you last contributed, we hope you’ll consider contributing to HuffPost once more.
Support HuffPostAlready contributed? Log in to hide these messages.