Shortages vary by sector and geography. The US workforce will shrink as baby boomers (born between 1946 and 1964) retire and are replaced by the smaller cohort of Generation Z (born between 1997 and 2012). Pre-pandemic, many boomers worked past retirement age, slowing the workforce decline, but the pandemic broke that trend.
- The US labour market holds the key to the inflation outlook and thus the timing of the Fed’s tightening of monetary policy.
- Unemployment is set to drop below the so-called ‘natural’ unemployment level, the non-accelerating inflation rate of unemployment (NAIRU).
- Diversity and inclusion policies will accelerate the workforce exit of baby boomers as that generation has the largest share of white men.