ACCORDING to Donald Trump, America’s “real” unemployment rate is higher than 40%. The fact hiding behind this Trumpism is that America’s labour-force-participation rate—the fraction of the population either in a job, or looking for one—is only 63%. The Donald is mixing up his economic barometers. But America’s low participation rate has captivated economists almost as much as unemployment, ever since participation tumbled dramatically after the financial crisis. Recently, it has begun a belated recovery.
In early 2007, 66% of Americans were in the labour force. After recession struck, participation tumbled, falling to 64% by 2012. By September 2015 it had hit 62.4%—its lowest since 1977, when less than half of women worked. Since that low, however, participation has come back into fashion: 2.4m Americans have joined the labour force in the last six months, pushing the rate back up by 0.6 percentage points. As a result, despite the simmering jobs market—the economy created 215,000 net new jobs in March—unemployment is fairly steady. It was 5.1% in September, and is now 5%.
Both the big fall in participation...Continue reading
Source: United States http://ift.tt/1pK5wYh
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