It's a simply consequence of their need to raise interest rates to control inflation. If you make it harder to get loans, businesses will reduce expansion plans which in turn causes an increase in unemployment. The goal is to balance the two and tame inflation without unemploying millions.

I'm not sure how much of this was avoidable but it is the current state of the US economy.

From what I can understand, it seems that this is only true if you consider increased wealth concentration the primary purpose of the economy.

They're not saying it's good as much as it's acceptable given the inflationary pressures attributable to cheap money and the labor shortage. Right now employment is bumping up against a hard boundary and it's creating stress on businesses. Higher rates will slow investment, reduce hiring and reduce prices. The Fed is aiming for a middle ground where they can slow inflation knowing that will unemployment will tick up, but ideally just a smidge.

We're probably pushing over the edge of "full employment" right now and backing off a little bit will be a net win for the country with a small amount of losers. https://en.wikipedia.org/wiki/Full_employment

> Wait - so unemployment is bad. Unless enough people have jobs, then it's good?

Yes.

The ideal amount of unemployment isn't zero. People quit jobs and move to new cities (sometimes following their spouse who gets a new job) and then look for work there. People upgrade their skills. There are a lot of reasons people might temporarily be unemployed. If they don't have the freedom to do those things, that's bad.

If the unemployment rate is zero, that also means that there are jobs that literally cannot be filled and are not being done. That's bad too.

Obviously, an unemployment rate of 20% is also bad.

Zero unemployment causes wages to go up fast as employers must constantly outbid each other for workers. This is bad in a theoretically efficient market because each employer is already running at maximum efficiency and every job is necessary, so there's no slack in the system. In the real world with super high executive pay, massive inefficiency, and massive employment of exploited, underpaid immigrant labor, it's less of a problem.

> If the unemployment rate is zero, that also means that there are jobs that literally cannot be filled and are not being done. That's bad too.

Well... I'd argue that depends on which jobs it is that goes unfilled. I'm sure many people here have worked jobs that would be better off not done.

If there are too many jobs that need doing, do you think the undone jobs are janitorial at minimum wage or shuffling papers in an office for substantially more?

This is overly reductionist. Economics, like life, is complex and situational.

Lack of water can kill, too much water can kill. This isn't voodoo nonsense.

> Wait - so unemployment is bad. Unless enough people have jobs, then it's good?

Is that surprising? eg.

"Wait - so under-eating is bad. Unless you're overweight, then it's good?"

I guess I'm trying to understand why we need some people to not have jobs, and also why the same people who say this fight so hard against helping folks in bad spots. If having unemployment is so important, why does everyone treat the unemployed as morally inferior - it's clearly a vital economic function.

edit: to put it another way - (extending your metaphor) who is doing the eating of us normal workers? Why am I someone's food?

So the rest work harder, which means less dollars for more work, which makes prices go down (or rather: not rise quite as quickly). Banks can't fix things, they can just cause more pain on poor people, so they fix things.

That inflation is mostly caused by oil prices, and no amount of extra work by people will make oil prices drop ... This is why we've had recessions before, this is why it's happening now ... is something the central banks or government cannot influence, and therefore this "cannot" be the cause (granted, this is true but doesn't provide a solution, so from a utilitarian perspective one might agree with this).

The FED is making things worse, but hasn't yet been sufficiently scared into turning things around. The stock market is only ~20% down, and they usually turn things around at about a 35% drop. So we're already past the halfway point, and FANGs (except FB/META) are holding out quite well, so they seem to be safe harbors.

Nobody is excited about increasing unemployment, and you don't always need more unemployment to tame inflation.

The idea is that in the specific current situation of inflation disaster, measures required to tame inflation maybe required.

Like a infection, first line of defense is antibiotics, but if you wind up in a bad situation, you may need to take a more harmful response like amputation.

So who is going to be the ones who have to suffer for it?

I'm guessing its not the folks who could afford a stint unemployed that will be asked to do vital economic functions. I wonder how many people y'all are going to kill for your inflation woes.

I get it though, all these people who just got jobs and who just moved to better jobs are way too uppity and need to be put down. Heaven forbid they do anything that isn't worry about paying for a slightly comfortable life. Good for you, helping to put those hard working folks in their place - they don't need anything other than stress and worry and work.

Who do you think is hurt by inflation? Largely the same people hurt by unemployment.

Someone with a million dollar mortgage and inflation proof investments is probably cheering on inflation.

A family struggling to buy food and shoes for their children suffers from inflation.

A family is going to struggle a lot more when they can't get a fucking job.

I agree, it is just a question of balancing numbers. Is it better for a 100 families to struggle with costs, 1,000, ect

I dont think anyone is trying to argue that unemployment is a good thing in an absolute sense.