By Andrew L. Jaffee

Americans received great news on the employment front today (unless you’re one of those bond market ghouls who worry excessively about inflation). One Federal Reserve official believes the U.S. is at or near full employment. Translation: those looking for work are finding work. From CNNMoney:

Job growth picked up in February, topping forecasts on Wall Street, according to a government report Friday.

The economy generated 243,000 new jobs last month, up from a revised 170,000 in January, the Labor Department reported. Economists surveyed by Briefing.com had forecast a gain of 210,000 jobs.

It marked the second best gain in U.S. payrolls over the last 12 months, trailing only November, when job growth bounced back after being depressed by the impact of hurricanes Katrina and Rita.

Here’s what the Fed is thinking, from FOXNews:

In December, Richmond Fed President Jeffrey Lacker said that while the jobless rate could drift a bit lower, he didn’t see a “major movement” ahead — adding that the then-5.0 percent unemployment rate was “consistent with a relatively full utilization of resources right now.”

In other words, the economy was pretty much at full employment, and wage pressures were on the horizon.

But some economists say that while the job market is tighter than a year ago, it’s still not inflationary.

Another translation: The Federal Reserve tries to regulate the U.S. money supply to prevent inflation, which is an increase in the prices of goods and services. Obviously (or not so obviously when hearing econo-speak), higher prices hurt citizens. So if everyone seeking work is finding work, companies may have to increase wages to competitively attract new workers from a smaller pool of available workers. If companies have to increase wages, they may pass this cost on to their customers in terms of higher prices. Then consumers have to pay higher prices, etc., etc. Inflation can become an awful, endless spiral — as in the 1970’s. I doubt we’re headed for anything like that.