>Shrinking labor force explains drop in unemployment
2011 Economic Policy Institute
Last Friday’s release of the Employment Situation report by the Bureau of Labor Statistics showed the economy added 120,000 jobs, dropping the unemployment rate to 8.6 percent. Despite this positive sign, last month’s rate of job growth was still too low to begin healing the labor market. In her analysis of the report, labor economist Heidi Shierholz explained that most of that decline can be explained by the drop in the labor force participation rate from 64.2 percent to 64.0 percent.
“The U.S. is currently 6.3 million jobs below where it was when the recession started. But because the working-age population grows as the population expands, in the nearly four years since the recession started, we would have needed to add around 4.6 million jobs to keep the unemployment rate from rising,” wrote Shierholz.
This means the labor market is lacking roughly 10.9 million jobs.
In this week’s Economic Snapshot, EPI President Lawrence Mishel further explained how the shrinking labor force helped paint a rosier picture of November’s job growth than what the underlying data really show.
https://www.epi.org/news/shrinking-labor-force-explains-drop-unemployment/
