Note: This is an update to an earlier post.
In November, Goldman Sachs economists put out a research note on the labor force participation rate: Why Isn’t Labor Force Participation Recovering?
While the unemployment rate continues to fall quickly, labor force participation has made no progress since August 2020. … Most of the 5.0mn persons who have exited the labor force since the start of the pandemic are over age 55 (3.4mn), largely reflecting early (1.5mn) and natural (1mn) retirements that likely won’t reverse. The outlook for prime-age persons who have exited the labor force (1.7mn) is more positive, since very few are discouraged and most still view their exits as temporary.
The jobs number comes from Current Employment Statistics (CES: payroll survey), a sample of approximately 634,000 business establishments nationwide.
These are very different surveys: the CPS gives the total number of employed (and unemployed including the alternative measures), and the CES gives the total number of positions (excluding some categories like the self-employed, and a person working two jobs counts as two positions).
This data is comparing December 2021 to December 2019, using Not Seasonally Adjusted (NSA) data (I compared to December 2019 to minimize the seasonal impact when using NSA data).
Almost all of the missing employed workers – by this method – are in the 25 to 29, 45 to 49, and in the 55 to 59 age groups.
Note: this is over a 2-year period, and there have been some demographic shifts between cohorts.
This data would suggest most of the missing workers are prime age or took early retirement (the missing workers in their ’50s).