At 38-Year Low, Labor Participation Rate May Have Found Footing

[Purveyor]

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WASHINGTON (MarketWatch) — It’s an odd thing to say for a number at a 38-year low, but it looks like the percentage of Americans who participate in the labor market has found its footing.

In July, the labor-force participation rate stayed at 62.6%. The rate — alluded to last night by Republican presidential candidates in a televised debate bemoaning the state of the economy — hasn’t veered from a 0.6 percentage point range in nearly two years.

This low participation in the workforce — due to a combination of an aging population, discouraged workers and other factors — has important implications for the U.S. economy and the ability of the U.S. to finance its spending.

Much of the decline stems from the growing number of baby boomers, who naturally are retiring. The number of people who are 65 years and over, without a disability, who are not in the labor force rose to 24.7 million in July — a rise of about 5 million people since 2008.

“Some of the decline in the participation rate is demographic in nature, as older workers have lower participation rates (even though their participation rates are rising, an increasing share of older workers with lower absolute participation rates weighs on the overall measure),” said Josh Shapiro, chief U.S. economist at MFR.

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http://www.marketwatch.com/story/at-38-year-low-participation-rate-may-have-found-footing-2015-08-07