there is a current labor force shortfall of roughly 3.5 million people, reflecting lower population growth as well as lower labor force participation that forecasters had expected to move back up fairly quickly after the pandemic faded.
Powell stressed more retirements than expected accounted for about 2 million of the 3.5 million labor force shortfall, as older workers worried about their health, saw their overall wealth rise alongside housing prices and simply decided to opt out. He also noted the labor pool of younger workers is smaller than previous generations, a generational phenomenonalike alongside the mathematical certainty that there will simply be fewer workers.
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