| February 2020 | March 2022 | |
| Employment | 158.866 million | 158.458 million |
| Unemployment | 5.717 million | 5.952 million |
| Unemployment Rate | 3.5 percent | 3.6 percent |
Source: US Department of Labor, Current Population Survey. Data are seasonally adjusted.
Some jobs data are now significantly stronger than they were 25 months ago. For example, the number of individuals usually employed full time was almost 2 million greater last month (at 132.7 million) than it was in February 2020 (130.8 million). During the same period, the number of part-time workers fell from 27.8 million to 25.9 million.
Other data continue to lag significantly behind pre-pandemic levels. For example, both the overall employment-to-population ratio and the labor force participation rate remain a full percentage point below pre-pandemic levels. That contributes to the nearly 4 million additional adults now on the sidelines of the economy, who are officially recorded as “not in the labor force”:
| February 2020 | March 2022 | |
| Employment-Population Ratio | 61.2 percent | 60.1 percent |
| Labor Force Participation Rate | 63.4 percent | 62.4 percent |
| Not in the Labor Force | 95.045 million | 99.035 million |
Source: US Department of Labor, Current Population Survey. Data are seasonally adjusted.
Drilling down into the number not in the labor force reveals that the bulk of the recent rise is among older workers. The number age 65 and over who are not in the labor force grew by over 2.6 million between February 2020 and March 2022. That’s more than double the 1.1 million increase among adults under age 65 over the same period. Some of that disparity naturally results from an aging society. But the employment-to-population ratio for those age 65 and over fell slightly in March 2022 to 18.6 percent, remaining well below the February 2020 level of 20.1 percent. Meanwhile, the employment-to-population ratio for prime-age workers between 25 and 54 continued its rapid recovery, reaching 80.1 percent in March 2022, which nearly matched the 80.3 percent rate in February 2020. (All data in this paragraph are not seasonally adjusted.)
Research in 2021 suggested that a significant share of those exiting the workforce during the pandemic reflected larger-than-expected retirements. An August 2021 study by the Federal Reserve Bank of Kansas City found that, from February 2020 to June 2021, “If the retirement share had risen at its 2010–20 pace, the number of retirees would have increased by 1.5 million during the pandemic. Instead, the number of retirees increased by 3.6 million.” ING economists noted in October 2021 that “We believe there is a more permanent loss of workers driven by a large number of older workers taking early retirement. The thought of returning to the office and the daily commute may seem unpalatable for many people and with surging equity markets having boosted 401k pension plans, early retirement may seem a very attractive option.”
The latest jobs report indicates that elevated retirements continue to boost the numbers on the sidelines of the US economy. While some may eventually “un-retire,” record gas prices that drive up the cost of returning to work, among other factors, could slow that transition, bolstering labor shortages in the months ahead.
Originally published by American Enterprise Institute. Republished with permission.
