The stock market has been hot but the job market has been cool, potentially leading some older workers to simply head for the exits sooner than they expected.
Friday’s jobs data showed that the overall labor force participation rate ticked down to 61.4% in July, the lowest since early 2021 when the economy was still reeling from the pandemic, from 61.5% in June and a full percentage point below December’s level.
That tracks with the participation rate among people 55 years and older, which dropped to 36.9% last month from 37.9% in December, while the rate for those in their prime (25-54) has only dipped by 0.4 percentage point in that span.
Of course, much of the drop among older Americans is due to retirement, with more and more baby boomers aging out of the workforce. But many boomers have also continued working past the typical retirement age, and the speed of the recent participation decline is also notable.
Adam Shapiro, vice president at the San Francisco Fed, pointed out that the drop in 55+ participation since the pandemic ended is comparable to the drop during the pandemic itself.
