What’s going on:
The prime age employment-to-population ratio in the United States, which measures the percentage of people between the ages of 25 and 54 who have jobs, is currently at 80.8%, according to Marketplace. This insight is based on data published by the U.S. Bureau of Labor Statistics, which shows that 4 out of every 5 people in this age group are working.
The labor force participation rate, which includes the entire population that is working or looking for work, stood at 62.6% in April — indicating a level that remains lower than the pre-pandemic benchmarks.
Why it matters:
The prime age employment-to-population ratio is regarded by some economists as a reliable gauge of the labor market’s overall well-being. This ratio focuses on individuals in their prime working years, and a higher ratio is indicative of a more resilient economy. However, the aging population in the United States poses a notable challenge to maintaining this high ratio. Many individuals who exit the workforce are not likely to reenter, potentially impacting the ratio negatively.
How it’ll impact the future:
Maintaining a strong economy in the U.S. will rely on the continued employment of individuals in their prime age, even as this demographic segment ages.
The prime age employment-to-population ratio could be a sign of increased consumer spending in the U.S. However, the current state of the labor market may also negatively impact employers in certain industries that are struggling to find employees. With employment as high as it is for many prime age workers, some industries will likely continue to struggle to fill open positions. This struggle to hire talented workers may cause some industries to increase employee benefits and wages.