That remains hard to pin down, but Friday’s data did signal some improvement.
Retiree ranks increased by 3.6 million from February 2020 to June 2021, greater than the 1.5 million retirements that would have been expected under the pre-pandemic trend for retirements, according to the Kansas City Fed.
If a large share find jobs in that time, that could lift the labor supply and ease wage pressures, he said.
Savings accumulated during the pandemic as consumers reduced spending, received stimulus checks and benefited from a federal pause on student loan and mortgage payments.
Still, he estimates about $500 billion was saved by households in the 20%-60% range of the income distribution, leaving those households with about $10,000 per person, which he projects will get spent down by the end of this year or early 2022.
Lower-income households, by contrast, have only about $1,000 saved on average, according to the JPMorgan Chase Institute.
That trend is reversing as infections drop and restrictions are loosened.
The decline in immigration could allow labor market conditions to stay tight even without a full return to pre-pandemic employment levels, said Jesse Edgerton, a senior economist at J.P.
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