United States: The participation rate is the key variable at present

The stimulation of demand at full employment in the United States has helped trigger a rise in the participation rate (the proportion of the working-age population available to the labour market). This rise in the participation rate has two very positive effects: Continued significant job creation and growth, and an increase in potential growth; Labour market pressure is reduced as new people enter the labour market, which prevents wage inflation from returning and makes it possible to keep interest rates very low. An end to the rise in the participation rate in the United States would be a very negative shock: significant slowdown in growth, return of inflation.