Fed's new challenge: a world without labor 'slack' - Reuters

As reported by Reuters, the US Fed is soon going to be facing a new challenge that the US central bank hasn't had to grapple with in a while: a lack of 'slack' in the labor market as labor shortages grow worse.

Key quotes

"According to recent economic data and documents from the U.S. Federal Reserve,  a U.S. labor shortage may be getting worse."

"Policymakers at the Fed, which holds its latest policy meeting this week, must now decide what weight to give to signs that the economy is reaching a point where wages, inflation and other laggard indicators may turn higher."

"And labor shortages have been cited by analysts as being responsible for the growing backlogs for manufactured goods in recent supply manager reports."

"The direction of wage growth will be critical to the Fed’s assessment, with Powell citing it as the missing piece in the discussion of whether “full employment” has truly been reached or exceeded. That, in turn, will shape the debate about whether the Fed may even need to move faster and further than expected with its monetary tightening."