Stocks post gains in March. This chart shows why retirement should still be a worry for investors.
While stocks have been seeing gains in March, there is another reason for worry according to this chart.
Recently, older Hollywood actors who played retirees in popular Netflix sitcoms such as 'Grace and Frankie' have found success.
The markets aren't laughing at retirement, as the Federal Reserve continues its fight to reduce high inflation, and the U.S. is still struggling with an estimated 2.1 millions workers who have left the workforce.
Stocks saw gains for investors in March, despite the failure of Silicon Valley Bank, the biggest bank failure since 2008. They may not yet be out of trouble.
Torsten Slok is the chief economist of Apollo Global Management. He pointed out another possible pothole in the markets on Friday. When adjusted for retirement and age, the labor-force participation has returned to its prepandemic high. But who will fill those jobs?
The report from the New York Federal Reserve on Thursday said that it is unlikely to be someone who falls into the "Grace and Frankie" age group. This is because the U.S. population has aged and the baby boomers have retired since the pandemic of 2020.
Researchers at the New York Fed wrote that a large part of the participation gap could be attributed to the aging of the population, which led to a rise in retirements. They also noted that they focused on those aged 60 and older.
Slok's message to the markets was that 'it will be even harder for the Fed' to control wage inflation, as there is not a large enough pool of workers to fill the record high levels of job vacancies.
FactSet reports that the S&P 500 index, SPX, +1.44%, rose 3.5% on a monthly basis, while Dow Jones Industrial Average increased 1.9%.
The Nasdaq Composite Index COMP, +1.74%, which advanced 6.7% in March, was the standout. It helped put it on track for its largest quarter since 2020.