A tight U.S. labor market is still adding to inflationary pressures, though less so than it did in 2022 and 2023, according to research published on Monday by the San Francisco Federal Reserve.

"Declines in excess demand pushed inflation down almost three-quarters of a percentage point over the past two years," San Francisco Fed economists Regis Barnichon and Adam Hale Shapiro wrote in the regional Fed bank's latest Economic Letter. "However, elevated demand continued to contribute 0.3 to 0.4 percentage point to inflation as of September 2024." READ MORE