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CHARTS

Rapid labor market healing expected postpandemic

Unlike following past downturns, the labor market is expected to heal in record time as the US economy exits the pandemic recession. In prior recessions, the unemployment rate took four to seven years to return to its natural rate*. However, we project the unemployment rate to fall below its natural rate (currently estimated by the Congressional Budget Office to be about 4.5 percent) in early 2022, only about two years after the recession started.

What are the implications of this stark recovery? Wage pressures tend to develop when the unemployment rate falls below its natural rate for a sustained period. In a tight labor market, workers can easily switch to higher-paying jobs and ask for raises. We are now experiencing a severe example of this process; wage growth accelerated in recent months, but mostly due to temporary factors that will ease toward the end of 2021.  However, after this brief pause, we can also expect wage pressures to resume in late 2022 and beyond due to ongoing demographic shifts in the US population that pre-date the pandemic.

For more details on the post-pandemic recovery in employment and a variety of other timely insights on the US labor market, please visit The Conference Board’s new Labor Market Chart Hub.

* The natural rate of unemployment is the unemployment rate that would exist in a growing and healthy economy.

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Thought leaders who provide trusted insights for navigating companies and the economy though COVID-19.

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Bart van Ark

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Lynn Franco

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Ataman Ozyildirim

Senior Director, Economics and Global Research Chair

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Matteo Tonello

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Gad Levanon, PhD

Vice President, Labor Markets

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David Hoffman

Senior Vice President Asia and Managing Director of the China Center for Economics & Business

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Rebecca L. Ray, PhD

Executive Vice President, Human Capital

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Anke Schrader

Research Director, the China Center for Economics and Business

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Amy Lui Abel, PhD

Vice President, Human Capital Research

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Thomas Singer

Principal Researcher

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Dr. Uwe G. Schulte

Leader, Global Sustainability Centre and Program Director

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Paul Washington

Executive Director, ESG Center

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Ilaria Maselli

Senior Economist

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Amanda Popiela

Researcher, Human Capital

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Elizabeth Crofoot

Senior Economist

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John Forsyth

Consumer Dynamics Leader, M&C Center

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Cindy Cisneros

Vice President of Education Programs

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Steve Odland

President and CEO

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Jeff Hoffman

Institute Leader, Corporate Citizenship & Philanthropy, ESG Center

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Joseph J. Minarik

Senior Vice President and Director of Research

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Erik Lundh

Principal Economist

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Robin Erickson, PhD

Principal Researcher, Human Capital

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JP Kuehlwein

Marketing Leader, M&C Center

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Denise Dahlhoff, PhD

Senior Researcher, Consumer Research

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Laura Sabattini, PhD

Principal Researcher, Human Capital

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Robert Schwarz

Senior Researcher, ESG Center

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Chiqui Cartagena

Former Chief Marketing Officer & Center Leader, Marketing & Communications

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Dr. Mahdy Al Jazzaf

Executive Director

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Devin O’Connor

Former Deputy Director, Economic Research

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