More people searched for jobs in August, easing labor market tensions

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The national labor force participation rate rose in August, and that’s exactly what the Federal Reserve wants to see. The increase in the number of people looking for work alleviates some of the inflationary pressure on wages without dampening growth.

The participation rate increased by three tenths of a percentage point last month. But the share of the population in the labor market was still 1 percentage point lower than in February 2020.

At the height of the pandemic, labor force participation fell across the board. But that really fell apart for the women, many of whom were forced to take on additional care work at home.

Friday’s jobs report shows a significant recovery there, said Jasmine Tucker of the National Women’s Law Center.

“Women aren’t quite back to where they were in February 2020 yet, but we’re getting there.”

There were still 427,000 fewer women in the labor force than before the pandemic, Tucker said. But among working-age women — 25 to 54 — participation picked up again in August.

Despite ongoing childcare challenges, labor force participation for this group has actually surpassed the February 2020 rate and is approaching an all-time high, according to Julia Pollak, chief economist for the site. ZipRecruiter job.

“It probably has a lot to do with remote work,” she said. “We know that women value remote work opportunities much more and that this pandemic has accelerated the 50-year remote work trend.”

Male turnout in this ‘core’ age group last month was still lagging behind its pre-pandemic baseline. But the biggest change in the labor force participation rate is for Americans 55 and older.

“We’ve seen a lot of accelerated retirements — people in their late 60s and 60s who have left the workforce,” said Aaron Sojourner, an economist at the WE Upjohn Institute for Employment Research.

Older workers have more health problems when it comes to working in person and are more likely to have accumulated wealth through stock market and real estate gains, Sojourner said.

As pandemic conditions have improved and wages have risen, some seniors have returned to the workforce, said Daniel Zhao, chief economist at Glassdoor.

“We have seen ‘non-retirement’ rates increase in recent months and more workers have returned to the labor market after retirement,” he said.

But that’s not enough to counter the massive demographic shift underway as baby boomers naturally age out of the workforce. One of the effects is that an increasing share of the population as a whole is made up of people who have reached retirement age.

“I don’t think we’re going to bring everyone back to old age,” Sojourner said.

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