Forecast Center
Forecast Center brings you forecasts on topics of general interest from authoritative sources, along with commentary and links to sources. Forecasts are long term and in the public domain.
Slow US Labor Force Growth Over the Next Decade
The US Bureau of Labor Statistics (BLS) projects that the labor force will grow only 0.4% per year between 2022 and 2032. This is significantly less than the 0.7% growth rate of population which itself has been declining. The labor force (which includes employment and unemployment) has been growing more slowly than population since 2000, a reversal of earlier patterns.
The main explanation for the slowdown in labor force growth is the aging of the baby boom generation as it moves into retirement ages. However, there also has been a decline in labor force participation of men which has not been fully offset by a rise for women, and a decline for 16–24-year-olds.
These projections are based on a number of assumptions which include a further decline in childbearing and an optimistic average annual rise in productivity of 1.9% during 2022-2032.
BLS states: “The rate of labor force growth will decelerate to 0.4 percent over the projection period, down from 0.6 percent in the preceding decade.” This can be expected to exacerbate quantity of labor shortages, the effects of which are compounded by shortages of skills and broader problems of labor quality.
Note: BLS does not include recessions in its long term forecasts and it does not fully account for illegal immigration.
November 25, 2023
For additional discussion see: " The Incredible Disappearing Workforce and Misreading of Inflation" in the Blog Library.
Health Care Spending Is Projected to Grow Faster than Incomes During the Next Decade
Federal health authorities expect spending on health care in the next decade to increase by nearly 6% per year, 1-1/2 percentage points more than growth of GDP (including inflation). This will raise National Health Expenditures from 17.6% in 2019 (before the pandemic buildup and subsequent decline) to 19.6% in 2031. Growth in health spending will be boosted in part by the increase in the number of elderly with the aging of the baby boom population.
Influences on expenditure growth which are not mentioned explicitly in the report include costs of new technologies and treatments which have had a major long-term impact. Some analysts have mentioned a bias toward development of more expensive treatments with more extensive insurance coverage, especially after the introduction of Medicare in 1966. Effects of any future expansion of health insurance coverage and/or government controls is not explicitly included in the forecasts but may have been incorporated through extension of past trends.
August 28, 2023