The U.S. economy is not at full employment, and likely will not get there until 2024, according to a research note of the San Francisco Federal Reserve Bank published on Monday.

The 4% U.S. unemployment rate, record job openings, worker shortages and rising wages suggest a very tight job market, which Fed policymakers say is one reason they feel it is time to start raising interest rates next month.

Not All People Back at Work

But labor force participation and the employment-to-population ratio "are well below trend, suggesting the labor market is short of the Fed’s maximum employment goal," wrote San Francisco Fed economists Sarah Albert and Robert G. Valletta in the bank's latest Economic Letter.

"Combining the downward trend in both series with their likely slow adjustment to a tighter labor market suggests that both will reach their long-run maximum employment levels in 2024," they wrote.

The Fed has signaled it will likely begin raising rates in March after keeping them near zero for the past two years to foster recovery from the pandemic recession.

Policymakers say the move will help tamp down inflation, running at its highest in nearly 40 years.

Labor Market to Continue to Gain Strength

They also say that with labor markets as strong as they are, the economy no longer needs the extraordinary level of support it has been getting from the central bank.

The research published on Monday suggests that labor markets could get stronger if a fading coronavirus pandemic allows more women and retirees to return to work.