Labour force participation increases for the fourth month in a row

Since about the turn of the millennium, the labour-force participation rate, or the share of American civilians over the age of 16 who are either working or looking for a job, has dropped pretty dramatically, with an acceleration in that drop after the 2008 financial crisis and the ensuing Great Recession.

There are several causes for that drop and for the rate continuing to be low. An August 2015 analysis by the President’s Council of Economic Advisors suggests that about half of the drop comes from structural, demographic factors: The baby boomers, an immensely large cohort of Americans, are getting older and starting to retire.

The Council of Economic Advisors found that the other half of the drop in labour-force participation came from cyclical factors tied to the Great Recession. In addition to the normal fall off in participation seen in other recessions, the depth and severity of the Great Recession pushed millions of Americans to the sidelines, discouraging them from even looking for work.

In recent months, the labour-force participation rate has steadily ticked up, possibly indicating a tightening labour market as people who were previously discouraged from looking for work move back into the labour market.

According to the March jobs report, labour-force participation increased for the fourth month in a row, reaching 63.0%:

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