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Today, nonfarm payrolls blew past expectations. Payrolls added in February amounted to 236,000 versus economists’ predictions of a 165,000 gain.However, the labour force participation rate ticked down slightly to 63.5 per cent from 63.6 per cent.
It’s not a big drop in the participation rate, but it is notable because it was accompanied by a substantial decline in the overall size of the labour force.
People reported not in the labour force rose to 89.304 million in February from 89.008 million in January.
Bloomberg News economics editor Michael McKee put it this way following the release:
The labour force participation rate dropped during the month, even though the labour force size dropped. So, you wonder, are people going to start coming back into the labour force because they think things are getting better, or is the unemployment rate being artificially depressed? Those are questions that we are going to have to sort out as the months go on.
So, that is one data point tempering the good headline news from today’s jobs report.
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