BCG Henderson Institute

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Tactical fears for the US labor market have dominated economic debate, but this misses the labor market’s structural underpinnings. We are in an era of tightness that was briefly interrupted, not caused, by the pandemic. Tactically, the labor market remains robust at the aggregate and sector levels even as wage growth slows. Structurally, we think a confluence of drivers underpins a durable era of tightness, delivering stronger growth across cycles.