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Stalled Participation Rate Hints At Continued Labour Supply Constraints

US DATA
  • The recovery in participation rates appears to have plateaued in recent months.
  • The total participation rate surprisingly dipped 0.17pts to 62.2% in June (cons 62.4%) to the joint low for the year and 1.2pts below Feb’20 levels.
  • Perhaps more surprising though was the larger 0.3pt drop in the prime age rate from 82.6% to 82.3%, as it’s generally been dragging the total higher in the post-pandemic recovery, with the drop coming from males and females alike. It’s back at February levels and 0.7pts below Feb’20 levels.
  • Following the still close to record high job vacancies to unemployed ratio in May, it won’t help alleviate issues of excess labour demand.

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