As Friday’s employment report showed strong job growth across the country, labor force participation rates among prime-age workers have recovered to levels last seen three years ago.
In February, labor force participation for 25- to 54-year-olds came in at 83.1% — the same it was in January 2020.
Women are leading the recovery, the data shows. Women left the workforce in early 2020 to a greater extent than men. Now, they are also returning at rates outpacing their male counterparts.
Federal Reserve Chair Jerome Powell cited the imbalance between job seekers and jobs as one of the drivers of inflation. Speaking to Congress on Tuesday, Powell called the job market “extremely tight,” noting that in December there were almost two job openings for every job seeker.
Powell indicated that the Fed could continue accelerating interest rate hikes if inflation remained high, saying: “With inflation well above our longer run goal of 2% and with the labor market remaining extremely tight, [the Fed] has continued to tighten the stance of monetary policy.”