Retirees Are One Reason the Fed Has Given Up on a Big Worker Rebound

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It took until late 2010 for people between the ages of 55 and 69 to recover to their late-2007 wealth levels, according to Fed data. This time, an early-2020 hit had been fully recovered by June 2020. Financial wealth for that age group now stands about 20 percent above where it was headed into the pandemic, despite a recent market swoon.

And while inflation is eroding spending power, Social Security payments are price-adjusted, which takes some of the sting away.

The Liebermans in Pennsylvania, for instance, could go back to work part time if they needed to — but they do not expect to need to.

“Unless inflation went really ballistic, I think we’d be OK,” Mr. Lieberman said.

To be sure, while retirements could help keep workers in short supply across America, other factors could bolster the work force. Immigration, for instance, is rebounding.

And some data paint a more optimistic picture of the labor force: Monthly payroll figures from the Labor Department, which are based on a survey that’s separate from the demographic statistics, show that companies have continued to add jobs rapidly despite their complaints about a worker shortage.

“Listening to Jerome Powell talk about labor supply, he seems resigned to the idea that there’s nothing left,” said Nick Bunker, economic research director for North America at the Indeed Hiring Lab. “There are more workers out there who can get hired and want to get hired.”

But central bankers have to make best guesses about what will come next, and, so far, they have determined that an increase in labor supply big enough to cool down the hot labor market is unlikely.

“For the near term, a moderation of labor demand growth will be required to restore balance to the labor market,” Mr. Powell said last month.

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