ISCV - Where Are The Workers?

• Even prior to the COVID-19 outbreak in early 2020, the labor force participation rate in the United States had been in a structural downtrend for decades. However, the pandemic brought about a significant drop below the historic trend, with limited signs of recovery over the past 20 months.
• Over the coming months, the number of workers returning to the labor force will determine how many job openings can be filled and how quickly wage growth will retreat from its lofty levels.
• Wage inflation, a symptom of an otherwise tight labor market, bleeds into corporate earnings and our outlook for risk assets.
• Here, we’ll explore the various contributing factors to the participation rate, what we can expect going forward, and implications for both the Fed and risk assets.

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