The chart below is the reason why Fed Chair Powell talks so much about the tight labor market. There are 164 million people in the US labor force. And total labor demand is 169 million (defined as total employment plus the total number of job openings). In other words, labor demand is 5 million people higher than labor supply, which is why wage inflation is so strong. The solution to this imbalance is to either increase the labor supply, for example through higher immigration, or to lower labor demand for example through an increase in the unemployment rate, and this is the challenge for the Fed.
Source: BLS, Haver, Apollo Chief Economist
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