U.S. labor market is not tight

There has been a debate in the economic community about the "tightness" of the labor market. That is, if labor has too much bargaining power, they can set prices, which can put upward pressure on inflation. However, measuring labor market tightness is not an exact science, and there are many ways to measure labor market tightness, with the preferred measures being wage trends and employee resignation rates. Trends in these two components of the labor market have become more pronounced in recent months and are not trending tighter. In fact, they show that the economy is slowing down and returning to the weak growth trend that existed before the epidemic.

Wages are not always the best measure because, like rent, labor contracts are usually negotiated annually and are not updated in real time. This is why resignation rates often lead wage trends.