Is retirees returning to work a sign of a strong labor force or a recession? – Center for Retirement Research

What “not retired” can tell us about the job market.

Today, economists find themselves in a fog about the labor market.

First, September’s monthly jobs report was released a month late, and October’s report was canceled entirely. But, most importantly, the available data give mixed signals. The number of new jobs added to the economy has been growing slowly. However, unemployment remains low by historical standards. Job openings and employee resignation rates—measures of how easy it is to find a job and how comfortable people feel leaving their jobs, respectively—are falling rapidly (bad) but also in line with historical averages (good). What’s going on?

In these cases, I turn to any measure of labor market health I can find. As a retired researcher, one of my personal favorites is the non-retirement rate. The non-retirement rate is exactly what it sounds like: the proportion of workers who claim to be retired at a particular point in time and report that they are still working a year later.

Not retiring is one way older workers solve their financial and non-financial problems. Some retirees face financial pressures due to low savings rates, high medical expenses, and long lifespans; some find that retirement is not what they expected and may miss the social connections and sense of purpose that come with work.

One could imagine a high non-retirement rate being a bad sign for the economy, for example because the stock market is down and retirees need to work to make up for their losses. But overall, research shows that the stock market does not drive retirement behavior. Instead, workers tend to choose not to retire when they are easiest to retire—that is, when the job market is strong. So looking at the non-retirement rate can tell us something about the broader job market and where it might be heading. When the unretirement rate is high, the labor market is likely to be good.

To check what’s happening with the non-retirement rate, I conducted the same survey I do for the monthly jobs report (usually) – current population survey (CPS). I found several workers age 55 and older who claimed to be retired when interviewed by CPS. I then used the longitudinal characteristics of the CPS to follow these individuals when they were interviewed one year later. Those who said they were employed at the time were said to have not yet retired.

Figure 1 shows the proportion of retirees who did not retire from before the COVID-19 outbreak to the latest available data. (The time period on the chart indicates when the person was first interviewed, i.e. someone who said they retired in August 2024 and worked in August 2025 contributed to the August 2024 non-retirement rate). The graph highlights in red the period when people would have been in the COVID-19 job market without retiring (i.e., those who retired between March 2019 and December 2020) and those who did not retire between March 2020 and December 2021.

That number doesn’t paint a particularly rosy picture of the current job market. Just before the COVID-19 pandemic, the average unretirement rate was nearly 3%. That period was at the tail end of a long economic expansion, so the unretirement rate at that time could be considered a benchmark for a “good” job market. For those who entered the workforce without retiring due to COVID-19, the figure averaged 2.2% and ranged from 1.8%. For the latest available data, the ratio looks more like a coronavirus ratio than an expansion rate. The latest non-retirement rate is only 1.9%.

At a time when labor market data is scarce and conflicting, any measure can help. Today’s low non-retirement rate suggests that older workers are finding it difficult to re-enter the labor market and are therefore on the sidelines. Over the next few months, I will be watching closely to see if other labor market data starts to look equally bleak.