Millions of people who left the US job market last year plan to stay away in an act of 'long social distancing,' fanning the flames of inflation

Millions of Americans who left the job market last year plan to stay away indefinitely, which is likely to affect White House and Federal Reserve policy.

Three million people left the workforce last year and don't plan to return to in-person work, shopping, or eating out.

Their stance is partly due to persistent fears around the Pandemic.

Women, people without a college degree, and people working in low-paid sectors were the most likely to drop out. Pandemic fears were cited as a primary or secondary factor by a quarter of those unwilling to return to pre-pandemic activities.

The study found that at least 10% of respondents had no intention of returning to the labor force if required to do so.

The labor force isn't going to magically bounce back according to The Wall Street Journal.

The drop in labor-force participation may be enduring, as we still don't see any change in these numbers.

There is a suggestion that millions of people are opting out of the in-person economy because of COVID-19 restrictions.

Inflation reached a four-decade high in March. If inflationary pressures ease, workers might ask for a raise to cope with rising costs, potentially triggering a wage-price spiral that could make high price rises endemic.

The Federal Reserve Monetary Committee has signaled six rate hikes this year in addition to the two already delivered.

After US unemployment peaked above 23 million during the Pandemic, an additional 431,000 jobs were added last month giving cause for optimism. It was close to pre-pandemic levels.

The findings show that the labor market will remain tight, putting upward pressure on wages and prices even as interest rates rise. If the economy had continued to expand at its pre-pandemic pace, 3.5 million workers would have been left out, according to the team behind the study.

The US president was working with lawmakers to give paid leave to those who had to take time off after contracting the virus, according to Joe Biden's COVID-19 Preparedness Plan. The aim is to give economic security to workers in the labor force.