As the unemployment rate continues to decline – albeit likely at a slower pace than any of us would like – household formation and housing demand should increase. One model suggests that household formation could increase to 1–1/2 million or more per year.
Firms also face challenges in promoting new participation in the labor force, which has led to a rise in the employment rate of female spouses and the labor force participation rate of women (Charts 12 and 13). An increase in part-time and low-paid workers could result in a decline in wages per worker.