Tug War of
Hopeful sign in employment: participation picking up
W ASHINGTON — For most of an agonizingly slow recovery from the Great Recession, millions of out-of-work Americans huddled on the sidelines of the job market. Yet Friday’s jobs report added to evidence of a long-awaited shift: Some have grown confident enough to start looking for work.
The percentage of Amer- icans working or looking for a job, though still at near 40-year lows, rose for the third time in four months.
Americans in their prime working years — ages 25 through 54 — are driving the improvement and offsetting powerful demographic forces pushing in the other direction. In particular, the vast baby boom generation is retiring, which is reducing the proportion of adults with jobs or looking for one.
This has created a “tug of war,” says Joshua Shapiro, chief U.S. economist at forecasting firm MFR, Inc., between rising retirements and the employment opportunities created by an improved economy.
“The fact that we’ve stabilized now after a long decline suggests people are finally getting enticed back into the labor force,” Shapiro said. The workforce includes both people who are employed and those looking for jobs.
Earlier in the recovery, increasing retirements and sluggish hiring were pushing in the same direc- tion. The result: A sharp drop in the proportion of adults in the workforce. The unemployment rate fell, but the reason was nothing to cheer: With fewer people seeking jobs, fewer people were counted as unemployed.
Now, the trend is more promising. More people are looking for work. And the decline in the unemployment rate in the past two years — from 6.6 percent in January 2014 to 4.9 percent last month — has occurred mostly because people are finding jobs.
The overall improvement remains modest.
The percentage of Americans working or looking for work ticked up to 62.7 percent in January, up from 62.4 percent in September, which was near a 40-year low.
Figures for those ages 25 through 54 are more hopeful: The proportion working or looking for work has reached 81.1 percent, the highest point in a year. And the percentage in that age bracket with jobs has reached its highest level since 2008.