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I just returned from an industry conference over the weekend, and in speaking with the many ready-mixed concrete producers present, I drew a mental mosaic about the state of our industry. Everyone is saying the same thing, “Business is very good, but we can’t find enough drivers”. This is a constraint that spills past the cabs of our mixer fleet, and is affecting every single contractor and trade in construction across the country.

I have written on this stubborn issue multiple times in the past year, and so now the news comes last Friday that unemployment has fallen to 3.9%. Our economy added 164,000 jobs last month, the first time it has come in below 4% since December 2000. But of landmark importance is that, before those few months at the turn of the century, you have to go back to January 1970 to find a jobless rate in the United States that started with a ‘3’.

This is, as one business publication stated, fantastic. And it’s a fact that should shape how people think about the broader economic picture, as surely it will continue to drive consumer sentiment in the right direction. As I have reported many times, the consumer represents 70% of the economy in our country, and consumer sentiment is always self-fulfilling; with this news, consumers should continue to feel better despite the political unease in Washington.

Even a few years ago, most economists would opine that getting to an unemployment rate below 4% would have seemed impossible. In fact, it has long been held that a rate of 5% represents full employment, when you see all the “Help Wanted” signs appear in fast food restaurants across the country.

But in a time with the lowest jobless rate in 18 years, it is important to note that job creation is increasingly limited not by employers’ optimism or confidence, but on the hard limit caused by the finite number of humans to fill those jobs. For workers, that typically means higher wages, but the April numbers belied that notion. Average hourly earnings for private-sector workers rose only 0.1%. While there has been some limited evidence that employers are starting to raise wages because of the tight labor market, it isn’t yet clear that there is some overwhelming trend toward wage increases. In the words of Goldilocks, this labor economy is “not too hot, and not too cold… just right.”

Nevertheless, the low unemployment rate masks the reality that we are at the still-depressed levels of participation in the workforce, which is hard to chalk up to a shortage of jobs. Only 79.2% of Americans 25 to 54 were working in April, unchanged from March. That number was 81.4% the last time the unemployment rate was at its current levels in December 2000. That means there are still around 2.3 million people in the United States of prime working age who might come back into the labor market if we were to match the standard from 18 years ago.

Higher wages would most likely help, but it would also help to better understand the non-economic reasons those people aren’t working. Unlike 18 years ago, more employers today are unwilling to hire ex-offenders or people with opioid and other addiction problems, a shift in hiring attitudes as we have directed employment policy on hiring employees with moral character, and on safety in the workplace.

For Federal Reserve officials and others who shape policy to try to guide the economy, the sub-4% jobless rate can serve as a reminder of how little we know with certainty about what the United States economy is capable of. For example, could joblessness fall below 3%, without leading to a huge outbreak of inflation? Conventional wisdom in economic forecasting circles would say the answer is clearly no. But it wouldn’t be unprecedented; the jobless rate fell to 2.5% in 1953 while inflation remained calm.

Nobody was predicting five years ago that we would have a sub-4% jobless rate in 2018. So the challenge for the entire construction industry as a whole, and ready mixed concrete producers in particular, is how to fill vacant jobs without increasing wages, and therefore reduce the risk of fanning inflation.