A shrinking workforce will have a massive impact on the country's economy in 2024, warns the US Chamber of Commerce.
A wave of retiring Baby Boomers, a group of Americans larger than the current defined groups across various ages, will lead to fewer people working, the report states.
"This has created a demographic shortfall for the workforce," according to the report.
Generally, economic growth occurs when the succeeding generation of Americans is larger than the ones currently leaving the workforce. With the Baby Boomer generation retiring and leaving the workforce "there are not enough workers in the younger generations to fully replace them", the report warns.
"In fact, it will be the key economic challenge we face for the foreseeable future. A shortage of workers will be hard on businesses, but for some consumers, it also means they will always be able to find a job that can support their spending," said Curtis Dubay, Chief Economist at the US Chamber of Commerce.
With the simple math of the generational breakdown, the economy is "likely to slow" in early 2024 because consumer spending will also slow, Dubay writes.
"The worker shortage will put a floor under how much the economy slows because job openings are going to remain far above the number of unemployed workers. Plus, wages have been growing smartly, and they are likely to continue to do so because the demand for workers outpaces their supply," the report states.