This morning’s August jobs report brought us news that, once again, labour force participation dropped.
The rate fell to 63.2% from 63.4% the month before. That’s the lowest since August 1978. So as the unemployment rate steadily drops, it’s important to keep labour force participation — arguably a better indicator of real employment — in mind. What good is a decreasing unemployment rate (now at 7.3% from 7.4% last month) if it’s a result of a mass exodus from the labour force?