Sadly, the decline in the unemployment rate for the last several years happened in part because many people have checked out and quit looking for work.
An editorial in this morning's Wall Street Journal suggests that a good jobs report for January, coupled with an uptick in the unemployment rate, might mean that more people are now looking for work.
The editorial notes:
The jobless rate rose because the size of the labor force increased while the overall civilian population declined amid the Bureau of Labor Statistics’ annual revisions. Both the labor participation rate (62.9%) and the employment-population ratio (59.9%) increased by two percentage points.
These key measures of labor market health have lagged during the Obama expansion, leading some economists to conclude that the U.S. has shifted to a permanently lower level of employment. This would be a significant restraint on the economy’s ability to grow, barring faster immigration. The trend to watch in future months is if faster growth and rising incomes continue to coax more Americans into the workforce.
Another hopeful sign last week was the blowout in the National Federation of Independent Business hiring plans index. The small business survey reported job openings at a level not seen since April 2006. NFIB cited a continuation of “post-election optimism” with gains in compensation “to recovery record high levels.” All of this confirms the increase in animal spirits that has also boosted stock prices. Now Republicans have to deliver the policies to keep it going.
Workforce participation is important not only in economic numbers but because work gives meaning to our lives. Rachel Di Carlo Currie has observed that It is . . . not hyperbole to describe long-term unemployment as “a huge national and personal tragedy.” Let's hope the economy will grow and more people will return to the work force.