Many Americans, including retirees, are returning to the workforce because inflation is making life more expensive than anticipated, according to The Wall Street Journal (subscription).
What’s happening: According to analysts, Covid-19 vaccinations, schools and childcare centers reopening, more flexible work opportunities, an end to pandemic related government support and higher wages are all causing people to return to work.
- But… they also say the recent jump in year-over-year inflation, from about 5% last summer to 8% in February, is a key factor.
The numbers: About 2.6 million Americans retired earlier than expected between February 2020 and October 2021, according to a senior economist at the Federal Reserve Bank of Saint Louis.
- Now, retirees are returning to work at rates not seen since March 2020, according to the jobs site Indeed.
- More than 480,000 people over the age of 55 entered the labor force during the last six months. For comparison, only 180,000 people in that age group entered the labor force in the six months prior to the pandemic.
What they’re saying: “We’re beginning to see the migration of the older cohort who expected to live on fixed income in a low interest-rate and low inflation environment,” said Joseph Brusuelas, chief economist at RSM US LLP.
- “That has not materialized; therefore, they have to come back to the labor force to create the conditions so they can retire.”
The big picture: “The job market improved for workers of all ages during the past six months, with the three-month moving average for the overall labor force rising by 2.5 million, raising the national participation rate to 62.4% in March from 61.7% in October.”