As the quest for qualified workers heats up, job vacancies are outnumbering hirings by more than 3.2 million. According to ING economists, labor supply should gradually improve, but with demand so strong, upward pressure on worker remuneration is likely to remain, contributing to inflationary pressures in the economy.
“Evidence implies that the number of persons retiring has increased significantly, much beyond what demographics would predict. According to some estimates, there are nearly 2 million more people.”
“The value of 401k plans has increased as equity markets have risen, and after not having to commute to work for 16 months, the urge to return to the office may not be as strong as it once was. With so many individuals potentially leaving the workforce permanently, the quest to locate labor may become even more difficult.”
“With enterprises desperate to hire and expand in order to take advantage of the reopening and the stimulus-fueled growth climate, they are progressively paying more to entice employees.”
“This is more bad news for US businesses, as it implies that employers will have to pay more not only to recruit new employees, but also to raise compensation more generally in order to keep existing employees. If this is the case, it will be a crucial narrative that keeps inflation higher for longer and may prompt the Federal Reserve to raise interest rates sooner than expected.”/n
