Fed Williams: Supply and demand are becoming more balanced, the unemployment rate may rise to about 4% by the end of the year

July 11th, the Federal Reserve Williams said that when there is a labor shortage in 2021 and 2022, we will see a large increase in the length of the work week, as employers try to get the job done. We are currently seeing work weeks return to more normal levels, which could be another sign that supply and demand are rebalancing.

There’s the question of whether employers are still keeping workers they’re not sure they need, but they know how hard it will be to fill them.

At the same time, in order to bring the inflation rate down to 2%, the Fed needs to reduce labor demand and raise the unemployment rate slightly. Williams predicted that the unemployment rate could rise to about 4% by the end of the year and 4.5% by the end of next year.