Workers aren’t coming back
Data released by the Labor Department this morning show that last month, 61.6 percent of the working-age population were active in the labor force, either working in jobs or looking for them. That is essentially unchanged from the summer of 2020.
The second most significant statistic is that wages are soaring. In May, average wages grew at a 6.1 percent annual rate. In April, they grew at an 8.7 percent annual rate.
Combined, these two statistics tell much of the story of the economy this spring: Employers are boosting wage offers in order to attract and retain workers, who are increasingly difficult to attract and retain. This is a situation you’d expect with employers’ demand for workers growing much faster than workers are returning to the labor market. Labor demand is booming, and labor supply is not keeping up.
Here is more from Michael Strain.