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Expand chart
Data: Federal Reserve Bank of Dallas; Chart: Sara Wise/Axios

As experts attempt to explain why businesses are struggling to hire, some have made the case that the pandemic encouraged older working Americans to retire earlier than expected.

Why it matters: If it's true that retirements are unusually high, then the labor market may have less slack than many assume.

  • However, it's not too unusual for people to retire only to eventually return to work again.

By the numbers: The percentage of the U.S. population in retirement has been increasing modestly for years, but jumped from 18.5% in February 2020 to 19.6% in May 2021. This is an increase of about 2.9 million people during the period.

  • In a study first conducted by the Dallas Fed in May, and updated in July for Axios, just 1.2 million would have retired assuming a continuation of 2019 retirement rates.
  • This means an extra 1.7 million retired earlier than expected.
  • This trend is confirmed by the labor force participation rate, which remains depressed at 38.4% for those age 55 and over. This is down from 40%+ levels before the pandemic.

What they’re saying: "Early-retirement decisions during the pandemic, boosted by well-cushioned 401(k) accounts, have partly dampened the supply of older workers," wrote Oxford Economics lead U.S. economist Lydia Boussour.

  • "The virus’ significant health risks for the most senior workers and their lower ability to telework led many to opt out of the workforce.”

Yes, but: "I am convinced that at least some of the retirement population is more transitory in nature, especially given that some are relatively young," Invesco chief global market strategist Kristina Hooper tells Axios.

  • Retirees could come back as wages increase and COVID risk subsides — and as retirement savings dries up, Hooper says.

The bottom line: "People’s decisions to work is affected by a wide array of factors, and even if some constraints are removed it’ll take some time before the post-COVID normal resembles the pre-COVID normal," Oxford Economics’ chief U.S. economist Greg Daco tells Axios.

Go deeper

Felix Salmon, author of Capital
Updated Sep 3, 2021 - Economy & Business

U.S. added 235,000 jobs in August, a massive slowdown

Data: Bureau of Labor Statistics; Chart: Axios Visuals

The U.S. economy added a meager 235,000 jobs in August, while the unemployment rate fell from 5.4% to 5.2%, the government said Friday.

Why it matters: It's the first jobs report to factor in the extent of the COVID-19 surge driven by the Delta variant — showing a massive slowdown in the recovery after July's blockbuster jobs report. Economists had expected 725,000 jobs to be added.

GOP Rep. Gonzalez retires in face of Trump-backed primary

Ohio Rep. Anthony Gonzalez (R) Photographer: Stefani Reynolds/Bloomberg via Getty Images

Ohio Rep. Anthony Gonzalez (R) announced his retirement on Thursday, declining to run against a Trump-backed primary challenger in 2022.

Why it matters: Gonzalez has suffered politically since siding with House Democrats to impeach the 45th president after the Capitol riot.

Swing voters oppose Texas abortion law

Protesters at a rally at the Texas State Capitol. Photo: Jordan Vonderhaar/Getty Images

All 10 swing voters in Axios’ latest focus groups — including those who described themselves as "pro-life" — said they oppose Texas' new anti-abortion law.

Why it matters: If their responses reflect larger patterns in U.S. society, this could hurt Republicans with women and independents in next year's midterm elections. The swing voters cited overreach, invasion of privacy and concerns about frivolous lawsuits jamming up the courts.