Unretirements as a Labor Market Indicator: December 2025 Analysis

The analysis focuses on “unretirements”—defined as the share of retired workers aged 55+ who report working one year later—as a critical labor market health indicator [1]. Using reliable Current Population Survey (CPS) longitudinal data, researchers find that unretirement is primarily driven by labor market strength, not financial factors like stock market performance [1]. Benchmark rates show a pre-COVID (strong expansion) average of ~3%, with COVID-era lows of 1.8% [1]. As of December 2025, the unretirement rate stands at 1.9%, near COVID lows, indicating a weaker labor market than conventional metrics (e.g., low unemployment) imply [1]. This aligns with other conflicting signals: slow job growth, falling job openings and quits, and delayed/cancelled monthly jobs reports [1].

1. Hidden Labor Market Fragility
   : The stark contrast between low headline unemployment and depressed unretirement rates suggests underemployment or reduced labor market dynamism, as older workers face barriers to reentering the workforce [1].
2. Job Market Strength as the Primary Driver
   : Unlike common assumptions, unretirement is less influenced by financial concerns (e.g., stock market fluctuations) and more by the availability and attractiveness of job opportunities [1].
3. Limitations of Conventional Metrics
   : This analysis highlights the need for complementary indicators like unretirement rates to avoid misjudging labor market health, especially during periods of mixed data [1].

• Policy Risks
  : Central banks (e.g., the Fed) might misinterpret labor market health based solely on low unemployment, leading to inappropriate interest rate or stimulus decisions [1].
• Employer Risks
  : A low unretirement rate reduces the pool of experienced older workers, potentially worsening labor shortages in sectors dependent on senior talent [1].
• Retiree Risks
  : Reduced ability to reenter the workforce could strain the financial security of retirees with insufficient savings or rising expenses [1].
• Opportunities
  : Policymakers and employers could use unretirement rate data to develop targeted strategies, such as workplace accommodations for older workers, to strengthen labor market resilience [1].

• Date
  : December 18, 2025
• Indicator
  : Unretirement rate (retirees 55+ returning to work within a year)
• Current Rate
  : 1.9% (near COVID-era lows)
• Benchmark
  : Pre-COVID ~3% (strong labor market)
• Driver
  : Labor market strength (not financial factors)
• Context
  : Published during a period of mixed labor market data with delayed/cancelled jobs reports