The U.S. economy may be as little as one month away from full employment, according to new research from a regional Fed bank.

The Dallas Fed argues the U.S. economy is only 675,000 jobs short of full employment. The U.S. added 850,000 jobs in June, taking the three-month average to 567,000 jobs per month.

Breaking news: U.S. job openings hit record 9.2 million, and businesses can’t find enough workers to fill open positions

The Dallas Fed report argues that labor-market slack should not be measured by where the U.S. economy stood before COVID-19 hit, but by a “neutral” labor market. The Dallas Fed said it used 360 different employment-rate profiles—based on the historic experiences of workers of varying age, racial, gender and educational backgrounds—to come up what would be the natural rate of employment of the working-age population.

The natural employment-to-population ratio has been slowly declining due to the aging of the U.S. population.

The answer to that complicated question is 58.3%–not terribly far off from the 58% that the employment-population ratio was in June.

“Our analysis shows that viewing the level of employment through the lens of the employment-to-population ratio does not indicate considerable slack in the labor market. Notably, the February 2020 labor market was tight and is not an appropriate benchmark for gauging the degree of remaining slack in the labor market,” the report said.

It’s important to note that the Dallas Fed analysis is very different from what’s coming out of the Federal Open Market Committee, and that Dallas Fed President Robert Kaplan has emerged as one of the more hawkish voices on the Fed. Fed Gov. Lael Brainard said earlier this month that the shortfall in jobs is over 10 million “if we take into account the secular job growth that would occurred over the past year in normal circumstances.”

The job-market assessment is vital because the Fed has conditioned monetary policy on the labor market. The Fed says it will start reducing bond-market stimulus when there’s “substantial further progress” in the central bank’s maximum employment goal.

Action in the bond market on Wednesday was pointing in the opposite direction to the Dallas Fed conclusion, as yields on the long-end of the curve declined, notably for the 10-year

and 30-year

securities. Yields move in the opposite direction to prices.

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