One factor is that new estimates show higher population growth over the past year amid a rebound in immigration from its reduced levels during the pandemic. Labor force participation also has edged up to 62.5 percent in the most recent data. Prime-age participation (for workers aged 25 to 54) is now back to pre-pandemic levels.
In our series of Fed Listens events in 2019, when we talked with a wide range of people and community organizations, we heard that a strong labor market can pull in people from the sidelines who have skills that can be developed if given a chance. That appears to be happening now.