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Retiring Sooner Causing Inflation

Crews Bank & Trust Wealth Management Services Dec 27, 2022
the Participation Rate shown by the falling orange line in the chart dates back to 2008

Contents

Today’s Chart of the Day comes from the Financial Times and includes an article asking if higher wage demands will increase inflation like in the 1970s. However, this time it is different since the workforce is shrinking as shown by the Participation Rate, the falling orange line in the chart. The participation rate is defined as the percentage of healthy people 16 or older who are actively working or looking to do so.

The rate dropped understandably during Covid-19, and recovered somewhat, but it is not back to pre-pandemic levels. Why? As our population ages, boomers are retiring faster than people turning 16 can replace them. The theory is that future inflation may be fueled by people demanding the same number of things as they continue to live; however, there could be less supply of those things as fewer people are working to provide them.

Thankfully, necessity breeds invention; therefore, don’t be surprised if you start to see more and more automation in our future.
Chart of the Day

About the Author

Crews Bank & Trust Wealth Management Services
Crews Bank & Trust Wealth Management Services

Experienced professionals from our wealth management services team can help you achieve a bright financial future through investment strategies tailored to you. We’ll show you all of the options available and help you choose the ones best suited to you. We’ll provide high-quality, personal service as we work toward your goals together. Our Portfolio Managers do not receive commissions on trades; our recommendations of investments are based solely on your best interests.

Investments are not a deposit or other obligation of, or guaranteed by, the bank, are not FDIC insured, not insured by any federal government agency, and are subject to investment risks, including possible loss of principal.

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