The national unemployment rate ticked down slightly in March, but it’s not exactly attributable to jobs gains. Rather, it’s because the labor participation rate continues to be in the basement:
“The unemployment rate dropped because of a further decline in the labor force participation rate, now at its lowest level since 1979,” writes economist James Pethokoukis. “If that rate were merely at March 2012 levels, the unemployment rate would have been 8.3%. At January 2009 levels, 11% (or 10.98%).”
This means that if the same number of people were in the labor market in March as there were in January of 2009, the unemployment rate would be nearly 11%.
Some, some argue that the shrink in the labor force is because of retirements in the Baby Boom generation. That’s certainly a factor, but even controlling for that issue the adjusted unemployment rate would still be at about 9.9%.
This is a pretty bleak picture of the “new normal” in our economy.