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Labour shortages are likely to persist, with the U.S. workforce projected to fall short of its pre-pandemic level by 1.5 million workers, says Fitch Ratings.

In a new report, the rating agency estimates that the U.S. labour force participation rate is down by 1.1 percentage points since December 2019, which translates to 2.9 million fewer workers employed in the U.S. economy, compared with pre-pandemic levels.

Of those “missing” workers, only about 1.4 million are expected to return to the job market, Fitch said, leaving a “substantial shortfall” in the workforce.

β€œThe post-pandemic recovery in the U.S. labour force participation rate will only be partial due to a surge in retirements in 2020 that are unlikely to be reversed,” said Olu Sonola, head of U.S. regional economics at Fitch, in a release.

Indeed, Fitch estimates that retirements exceeded normal pre-pandemic levels by approximately 1.1 million workers β€” and that most will not return to work.

“Almost all the excess retirements are over age 65 and are unlikely to rejoin the labour force,” the agency said.

Along with an increase in “discouraged” workers, another 1 million workers have left the workforce for other reasons, including increased family responsibilities such as child care and elder care, Fitch said.

“Many workers who left for child care are likely to return as evidenced by recovering participation rates for prime working-age women in November 2021, which coincided with schools reopening,” the agency said. “Nevertheless, the timing of this return is highly uncertain in the face of the surge in coronavirus cases in recent months.”

In the meantime, labour market conditions are expected to remain tight for the foreseeable future.