Americans are leaving retirement due to inflation and a tight job market, according to data released last month by job platform Indeed.
According to Bureau of Labor Statistics data, the number of retired seniors surged from 28.3 million in February 2020 to 31.6 million in October 2021, however, higher price levels and other economic challenges are now forcing Americans into “unretirement.”
Indeed reported that as of March 2022, roughly 3.2% of workers who were retired a year earlier are now employed.
Indeed said that a decrease and subsequent rebound in unretirement has precedent. During the Financial Crisis of 2007 to 2009 — the last major recession to impact the United States — workers were enticed out of retirement as the labor market became more lucrative.
Yet consumer price inflation rates after the Financial Crisis mostly stayed within range of the Federal Reserve’s long-term 2% target — briefly spiking to nearly 4% in 2011 before returning to relatively stable levels. The aftermath of COVID-19 and the lockdown-induced economic trouble, however, has been marked by once-in-a-generation inflation surges. As of March 2022, consumer price levels are increasing at an 8.5% rate.
“It is hard to rule out the influence of waning concerns about the pandemic and faster inflation, and they are surely factors,” Indeed acknowledged. “But it’s not clear that they are the main reasons.”
From October 2021 to March 2022 alone, more than 850,000 Americans returned to the job market, according to the Federal Reserve. Over the same period, inflation increased by another 2.3%, after already having risen from 1.4% in January 2021.
The rise in prices has outpaced nominal increases in pay, producing a nearly 3% decline in real wages — stretching Americans’ budgets with respect to food, gas, housing, and other necessities. A recent poll found that 94% of Americans were either “upset” or “concerned” about the impact of skyrocketing inflation, while a slim 28% approved of President Joe Biden’s approach toward managing price levels.
Experts, however, predict that inflation will continue to plague the American economy.
“Inflation, as we all know, when it gets in the system, it’s very hard to get it out,” billionaire investor David Rubenstein said on Fox News. “It takes a long time to get it out, can take a couple of years.”
“So now I don’t think the inflation rate this year will be what it was last month or so. I don’t think we’re going to have 8% annualized rate of inflation, but I suspect something around 5% is probably not unlikely, maybe even 6%,” he added.
Milken Institute Chief Economist Bill Lee agreed, saying inflation would be “well over 3.5%” for the next five years.
“One of the things that we’ve seen is that inflation has, you know, very direct impacts on Americans, on American families and American businesses,” Director of the Congressional Budget Office Phillip Swagel told Fox News Digital. “It also has implications… for the budget. For American families, the high inflation that we’ve seen the highest in decades has meant higher prices for food, for travel, for gasoline. It means that family incomes don’t go as far. Family budgets are stretched.”
To curb rising price levels, the Federal Reserve increased interest rates by a half point on Wednesday — which marked the largest rate hike since May 2000 and followed a quarter point increase from near-zero levels two months ago.
“Inflation is much too high,” Fed Chairman Jerome Powell said at a Wednesday news conference. “We understand the hardship it is causing, and we’re moving expeditiously to bring it back down. We have both the tools we need and the resolve that it will take to restore price stability on behalf of American families and businesses.”
Source: Dailywire
