Whenever I want the inside skinny on the jobs numbers, I turn to the Calculated Risk blog. No one can beat Bill McBride for his clear, steady tone (even when it felt as if the world was ending) or for his command of the numbers. And the charts are to die for.
The labor force numbers released last Friday for March were surprisingly weak — only 88,000 new jobs were added to the nonfarm payrolls, less than half the number predicted. The unemployment number edged down to 7.6%, but only because so many people gave up looking for work.
The participation rate in the labor force has been a major topic of debate over the past few years. Baby boomers are retiring, which would naturally reduce what is known as the participation rate in the labor force. There are other factors of well — both bad and not so bad.
Let me share with you what Bill McBride sees:
- Fewer 16- to 24-year-olds are in the labor force because they are going to school more. That’ should be a plus for the economy.
- The number of 25- to 54-year-olds is declining — a negative. Those are the prime working and saving years. The downtrend is a function of the recession and structural changes in the economy. (See chart on left; click on the graphic to enlarge.)
- More oldsters are working longer (some say so they can keep their health benefits). But there aren’t enough of this cohort hanging in to boost the overall participation rate.
For more details, go read the Calculated Rate blog post here. Eye opening.