Dan Crawford | June 2, 2017 9:51 am
Unemployment is down because labor participation is down. In a month when job growth is still exceeding the rate needed to meet the increasing population, why are so many people dropping out?
Arne – excellent question – Why are so many people dropping out?
In May the number of people who dropped out of the workforce totaled a whopping 608,000. The total that have dropped out is now at 94.98 million.
Was it really 608 or was it an annual pace of 608. I haven’t looked, honest question.
J.G. It was the monthly change. The number of people not in the labor force soared to 94.983 million, up from 94.375 million in April.
There is a lot of statistical noise in the monthly numbers. But there is something here that is significant.
http://cepr.net/blogs/cepr-blog/job-growth-slows-sharply-in-may dean baker
Dean Baker has more detail here:
I thought maybe people deciding now was a good time to retire, but Dean says “the drop in employment was among prime-age workers…”
It seems to me that low wages must be the answer, but that seems inconsistent with data finally showing wage increases.
One possible explanation is that when both husband and wife are unemployed, they are both looking for work. When the husband finds a job, the wife stops looking, and so drops out of the labor force.