Given the depth of the recession caused by the COVID-19 pandemic, the region’s economic recovery has exceeded expectations and is now moving into the expansion phase, according to Frank Lenk, MARC’s director of Research Services.
In a Dec. 9 presentation to the Greater Kansas City Chamber of Commerce, Lenk discussed how demand has snapped back faster than supply, however, this is creating upward price pressures. These should lessen over the next few months to a year.
Nationally, there is still some slack in the labor market, with a million fewer prime-age workers in the labor force than would be expected. Still, the labor market is tightening and most employers report difficulties finding workers.
This apparent paradox between fewer people working and employers needing workers is partly caused by the pandemic continuing to create hardships for caregivers. But also, there is an enormous amount of quitting going on.
Quitting naturally occurs when the demand for labor is high. But there also appears to be a shift in worker attitudes – what kind of job they want to come back to and how much it will take to lure them back.
With an aging population and limited immigration, even achieving historically normal growth rates will become difficult in later years.
This makes unlocking the untapped potential of the existing working-age population a key strategy to increasing future growth, competitiveness and inclusiveness of the region’s economy.
View The Path of Economic Recovery from the COVID-19 Pandemic presentation.