Labor Participation Rate Sinks to 36-Year Low

The last time it was this low was under Carter in March of ’78. But headlines attempt to tell a different story. The Associated Press ran a piece entitled “American Economy Bounces Back from Brutal Winter.” In it, they touted the official unemployment numbers, which have magically fallen, despite there being fewer people in the labor force.

But even they had to admit that it was just a silly numbers game, and that people shouldn’t be so naïve as to get their hopes up about the economy. Here were the article’s third and fourth paragraphs:

But the rate fell that far because many fewer people began looking for work in April, thereby reducing the number of unemployed. The proportion of Americans who either have a job or are looking for one dropped to a three-decade low.

And the monthly employment report the government released Friday showed that worker pay has yet to pick up — evidence that the job market has not fully recovered.

CNS News broke down the numbers:

A record 92,594,000 Americans were not in the labor force in April as the labor force participation rate matched a 36-year low of 62.8 percent, according to data released today by the Bureau of Labor Statistics.

In March, according to BLS’s non-seasonally adjusted data, there were 91,630,000 Americans not in the labor force. In April, that increased by 964,000 people to an all-time record of 92,594,000. The previous record was 92,534,000, set in January of this year.

The BLS’s seasonally-adjusted number for people not in the labor force–which was 92,018,00 for April–was also an all-time record. This was up 988,000 from the 91,030,000 seasonally adjusted number BLS said was not in the labor force in March.  (The previous all-time seasonally-adjusted high for people not in the labor force was 91,8080,000, which occurred in December 2013.)


The seasonally adjusted labor force participation rated dropped from 63.2 percent in March to 62.8 percent in April, matching a 36-year low. Prior to October 2013, the labor force participation rate had not gone as low as 62.8 percent since March 1978. In the last seven months it has matched that low in three months–October 2013, December 2013 and April 2013.


Because of the way the unemployment rate is calculated, the rate can actually go down even when the number of people who are employed is also going down.

This is why the official unemployment rate published by the BLS is really quite meaningless. It doesn’t take into account these people who are unemployed and no longer looking for work. There are likely millions of working-aged Americans in that very category. The unemployment rate only considers those who don’t have a job but are looking for work.

The BLS isn’t so much cooking the books as it is just publishing the numbers that are smallest. It gives the impression that the economy isn’t really all that bad after all, and we can all thank Obama for his tremendous effort to create jobs.

But it’s all a façade. People are dropping out of the work force, because businesses are crumbling under the burdensome taxes, regulations and mandates. The only way to get the economy going again is for the government to get out of the way.