English to German Bus/Financial Investment / Securities Inflationsentwicklung

Demographic changes imply that the trend labor force participation rate is only around 1.5% above the current level. This leaves little scope for a large pool of labor to weigh on wages, unlike the labor market dynamics in the 2010s, when the participation rate was higher. Any further improvements will likely continue to ***eat into current labor market slack***, leaving the economy exposed to insufficient supply when demand returns, forcing employers to compete for labor via higher wages.

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