Drop in U.S. Labor Force Difficult to Pin on Discouraged Workers
By Michelle Jamrisko Oct 3, 2014 10:57 AM ET
The pool of discouraged workers, those who are no longer hunting for a job because they believe none is available, shrank to 698,000 in September from 775,000 the prior month, according to Labor Department figures. The participation rate, which measures the number of Americans employed or looking for a job as a share of the working-age population, decreased to 62.7 percent, the lowest since February 1978.
That probably means that what economists call structural or secular elements, including the retirement of baby boomers or people deciding to leave work to start families or go back to school, are more likely behind the continued exodus that is helping drive down unemployment. Federal Reserve policy makers have little influence over these trends since an improving economy won’t bring many of those people back.
“More of the decline in the participation rate is secular,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets LLC in New York, who projected the jobless rate would fall. If this continues, “the participation rate is going to continue to decline as a result.”
The number of people going from being unemployed to leaving the labor force was at 2.19 million in September, close to the 2.15 million February reading that was the lowest since November 2008, according to the Labor Department. Because the data are volatile, it’s probably best to look at the average over the past three months, which at 2.25 million was the lowest since January 2009.
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http://www.bloomberg.com/news/2014-10-03/drop-in-u-s-labor-force-difficult-to-pin-on-discouraged-workers.html
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