Even the strongest job growth in two years isn’t enough to entice more people into the labor force, one of the biggest conundrums of the U.S. economic expansion.
The share of the working-age population either employed or seeking a job declined in April for the first time this year, helping drive theunemployment rate down to 6.3 percent, the lowest since September 2008, Labor Department figures showed yesterday. At 62.8 percent, the so-called participation rate matches the lowest since March 1978.
A shrinking workforce saps the U.S. of the manpower needed to boost the expansion to a higher level, keeping the world’s largest economy merely plodding along. It also undercuts the theory that sustained growth alone will be enough to attract more Americans, from students to people discouraged over employment prospects, back into the hunt for jobs.
“It doesn’t seem like the improving job market is really pulling people back into job-seeking,” saidMichael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. “It is kind of a sobering message about the supply side of the economy and the economy’s potential growth rate.”
The decline in participation from 63.2 percent in March came as fewer Americans entered the work force, while the number of people who have given up the search for employment remained close to the average for the last year. There were 783,000 of these so-called discouraged workers in April, compared with 835,000 a year earlier.