If the workers who dropped out of the labor force during the recession begin returning to it in substantial numbers over  BIS Review 25/2005  3  the coming year, then considerable gains in output and employment will be associated with little further tightening of the labor market and limited pressures on costs and prices.
If, in contrast, the labor market attachment of those out of the labor force is weak, then they will be less likely to seek jobs, which will mean that robust gains in output and employment could be associated with greater scarcity and an appreciable step-up in labor cost pressures.