The jobs report is out. Have you seen it? We’re told the numbers are good. I’m not so sure. What they reveal is a gigantic labor shortage.

The U.S. economy added 263,000 jobs in November and the unemployment rate held steady at 3.7 percent, the Labor Department said Friday.

Economists had expected the economy to add 200,000 jobs and the unemployment rate to remain unchanged at 3.7 percent. The range of forecasts by economists surveyed by Econoday was between a gain on payrolls of 150,000 to 275,000. On unemployment, the range of forecasts was 3.6 percent to 3.8 percent.

The Labor Department’s Job Opening and Labor Turnover Survey showed that there were 10.3 million job openings at the end of October, around 1.7 vacancies for every unemployed person. Federal Reserve officials frequently cite the vacancy ratio as evidence that the labor market is so tight that it risks fueling inflation.

The demand for labor from employers has proven highly resilient, adding to payrolls and vacancies even as the Federal Reserve has hiked interest rates up at the fastest pace in decades. The bottom of the Fed’s range for its benchmark rate has gone from zero at the start of the year to 3.75 percent today. The Fed is expected to announce a 50 basis point hike at its December meeting.

“In the labor market, demand for workers far exceeds the supply of available workers, and nominal wages have been growing at a pace well above what would be consistent with 2 percent inflation over time. Thus, another condition we are looking for is the restoration of balance between supply and demand in the labor market,” Fed chairman Jerome Powell said this week.

Most disturbing is a lean 62% labor participation. A declining supply of labor drives wages higher and in turn inflation. Inflation is the cancer on society, and weak political responses usually center around more free stuff driving national debt and, no surprise, more inflation.

My suspicion is that labor participation is reflecting the impact of Baby Boomers electing to retire. If I am right it will take the economy a while to readjust to a new normal. If the political sector takes the a short term approach by opening the Federal wallet, the result will be entrenched Inflation.

We must remember that Inflation is the rate of growth of costs, even as inflation abates, without the unlikely event of deflation, prices from 2019 will remain much higher.

The safest cure for the folly of Congress pouring trillions into the economy over the last two years is for Congress to stop monkeying with the free market and let the economy find its own new steady state.