“The Labor Crisis” – what’s really going on?

[It is estimated] that the labor force is roughly 900,000 smaller owing solely to unexpectedly weak population growth since 2019. Pre-pandemic projections from the Congressional Budget Office (CBO) forecast that the civilian population aged 16 and over would grow by 2.9 percent from 2019 through the beginning of 2023. Using the backcast CPS data, we estimate that the population grew a smaller-than-expected 2.4 percent, with the shortfall primarily due to deaths from COVID-19 and reduced immigration. As a result, the population is roughly 1.4 million people smaller than projected. Assuming the [labor force participation rates] of different demographic groups (defined by sex and broad age categories) did not change from 2019, the smaller population alone would imply a labor force roughly 900,000 smaller.