continue to suffer lingering symptoms from previous covid infections ( “ long covid ” ). 5 but recent research by fed economists finds that the participation gap is now mostly due to excess retirements — that is, retirements in excess of what would have been expected from population aging alone. 6 these excess retirements might now account for more than 2 million of the 3 - 1 / 2 million shortfall in the labor force. 7 what explains these excess retirements? health issues have surely played a role, as covid has posed a particularly large threat to the lives and health of the elderly. 8 in addition, many older workers lost their jobs in the early stages of the pandemic, when layoffs were historically high. the cost of finding new employment may have appeared particularly large for these workers, given pandemic - related disruptions to the work environment and health concerns. 9 also, gains in the stock market and rising house recent research suggests that long covid may be keeping 280, 000 to 680, 000 individuals aged 16 to 64 out of the labor force ( sheiner and salwati, 2022 ), and long covid may explain why the percentage of those aged 18 to 64 not in the labor force due to a disability has stalled over the past two years rather than continuing its pre - pandemic decline ( see also price, 2022 ). see montes, smith, and dajon ( 2022 ). this analysis adjusts for population controls to the current population survey. this adjustment is important, because while the unadjusted data show a marked decline in the retired share in january 2022, this drop is entirely an artifact of new population controls introduced in january. a proper assessment of the effects of retirements since the start of the pandemic needs to adjust the historical data for the effects of these population controls. see montes, smith, and dajon ( 2022 ). for example, see goda and soltas ( 2022 ). displaced workers aged 65 and over had markedly lower reemployment rates and markedly higher rates of labor force exit than did similarly aged displaced workers in the years just before the pandemic. see bureau of labor statistics ( 2022 ). - 7prices in the first two years of the pandemic contributed to an increase in wealth that likely facilitated early retirement for some people. the data so far do not suggest that excess retirements are likely to unwind because of retire

higher as well. member states should also take note of the european commission's fiscal policy guidance for 2024. turning to growth, we moved away from a baseline scenario with a technical recession at the turn of the year, as economic activity proved to be more resilient than expected at the end of 2022. in our march projections, the outlook for growth was revised up, to an average of 1 % in 2023. however, these projections were finalised before the events of the past few weeks, which are now adding uncertainty to our assessments. nevertheless, reduced concerns about energy shortages and price increases, coupled with the continued resilience of the labour market, are expected to support activity over the coming quarters. in short, the growth outlook remains weak, but it has improved somewhat. at the governing council meeting in march, we decided to increase the three key ecb interest rates by 50 basis points, in line with our determination to ensure the timely return of inflation to our 2 % medium - term target. as part of the monetary policy normalisation process, from the beginning of march, our asset purchase programme portfolio has been declining at a pace of €15 billion per month, on average, and it will continue to decline at this pace until the end of june 2023, while its subsequent pace 2 / 3 bis - central bankers'speeches will be determined overtime. uncertainty has increased, so we are monitoring current market tensions closely and stand ready to respond as necessary to preserve price stability and financial stability in the euro area. but let me go back to financial stability. just a few weeks ago, before tensions in financial markets emerged on both sides of the atlantic, the overall improvement in the outlook for growth and inflation was supporting overly benign macro - financial expectations on the part of banks and financial market participants. despite rising funding costs, bank profitability has improved, driven by significantly higher net interest income while impairments and provisions have been muted so far. overall, from a system - wide perspective, euro area banks are moderately exposed to interest rate risk. most are actually positioned to initially benefit from increasing interest rates, which boost net interest margins. on average, loan book repricing tends to more than offset higher funding costs and mark - to - market losses on fixed income securities. it is inevitable however that, with the tightening of financing conditions and in line with our policy objective, lending dynamics are weakening and may weigh on bank profitability going forward. of course, certain bank business models