Market Commentary

Labor Participation

In recent weeks we have been reporting on the various jobs statistics in America. The monthly jobs report, which tells us the number of new jobs produced and the unemployment rate, garners the most attention. Then there is the job openings numbers and the ‘quit’ rate that are very revealing. We wrote about them last week. Finally, there is the labor participation numbers that some consider to be the most important labor statistic.

This number details how many of our available working age citizens are actually working. To that end the share of primetime workers ages 25 to 54 is at the highest level since 2008, at 80%. So it took 11 years after the recession to reach pre-recession levels in labor participation. That is a very slow recovery and unprecedented. Normally the recovery is much faster.

It was at a 26-year low between 2007 and 2009 and the soft growth coming out of the recession retarded the recovery. This number is important because this group of workers buy houses, grow families and spend a high percentage of their income which all contributes to a healthier U.S. economy.

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