According to a recent analysis from Goldman economists, the U.S. could easily experience a permanent loss of nearly 1.2 million workers from early retirement and declining immigration. That’s the bad news; the good news – Goldman agrees – is that young workers who are reluctant to return to work are even more likely to do so once they lose those temporarily disincentives to work (later this year). As a result, Goldman is looking for the labor force participation rate to rise to 100bps next year in addition to 62.6% (if 0.8% still below the 63.4% pre-pandemic rate).
Why does this matter? Because while the job market is now a total shitshow because of Democrat policies that pay potential workers more to do nothing but work, leading to a record 9.3 million job openings…
… And as a result there is a historic unemployment rate, which is expected to change in September when preferred unemployment benefits are exhausted. That is why, it is generally expected by consensus that the recovery of labor force participation will accelerate in the coming months as many unemployment insurance benefits and other unnecessary labor-related supplies end. in pandemics such as school closures and exposure to health hazards.
But looking ahead to the near term – 6 or more months from now – should we expect a full recovery in the labor supply? That’s what Goldman’s response to the latest economic note is trying to do.
The vampire squid begins by reminding us that in December, it warned of a surge in early retirement that could continue to run the labor force rate (LFPR). Since then, the number of surplus retirees – defined as the difference between the actual number of retirees and the number of retirees reflected in the annual retirement rates observed in 2019 – has increased to 1.2 million, a 0, 5% hit by labor force participation rate in addition to almost 0.2% structural pull from aging population from the onset of the pandemic.- READ MORE
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