JOB NUMBERS DISCOURAGING Participation lowest since 1978


Via http://rochesterdemocrat.ny.newsmemory.com/

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Applicants reach for registration forms to attend a job and career fair at Columbia University in New York City in this Aug. 8 photo.BEBETO MATTHEWS/ AP

“You saw more people leave the job market and fewer people get jobs. Not a good sign.”

Paul Wiseman

Associated Press

WASHINGTON — The drop in the un­employment rate in August to a 4 1 ⁄2-year low was hardly cause for celebration. The rate fell because more people stopped looking for work.

More than 300,000 people stopped working or looking for a job. Their exo­dus shrank the so-called labor force par­ticipation rate — the percentage of adult Americans with a job or seeking one — to 63.2 percent. It’s the lowest participa­tion rate since August 1978.

Once people without a job stop look­ing for one, the government no longer counts them as unemployed. That’s why the unemployment rate dropped to 7.3 percent in August from 7.4 percent in July even though 115,000 fewer people said they had jobs.

If those who left the labor force last month had still been looking for work, the unemployment rate would have ris­en to 7.5 percent in August.

“Pretty disappointing,” said Beth Ann Bovino, U.S. chief economist at Standard & Poor’s Ratings Services. “You saw more people leave the job mar­ket and fewer people get jobs. Not a good sign.”

Back in 2000, the participation rate hit a high of 67 percent. At the time, women were pouring into the labor force. But women’s participation fell modestly through the mid-2000s — then dropped sharply from late 2009 through2 013 .

Women’s participation rate was 57 percent last month, down from a peak of 60 percent in 2000.

For men, the participation rate last month was nearly 70 percent. Their par­ticipation peaked in 1949 at 87 percent and has declined gradually in the dec­ades since.

In a 2011 report, the Congressional Budget Office noted that the recentdrop in women’s participation was par­ticularly steep among those with depen­dent children and well-educated women married to high-earning men.

Another factor in the declining par­ticipation is that the oldest baby boom­ers have reached retirement age.

But Craig Alexander, chief econo­mist at TD Bank Group, says “demo­graphics cannot explain the amount of decline” in labor force participation.

Many Americans without jobs re­main so discouraged that they’ve given up on the job market. Others have re­tired early. Younger ones have enrolled
in school.

Some Americans have suspended their job hunt until the employment landscape brightens. A rising number are collecting disability checks.

“It’s not necessarily people retiring,” Bovino says. “It’s young people going back to school” rather than taking their chances on a weak job market.

Labor force participation for Americans ages 16 to 19 was just 34 percent last month. That’s near their record low of 33.5 percent set last year.

It isn’t supposed to be this way. After a recession, a brightening economy is supposed to draw people back into the job market. But it hasn’t happened. Labor force participation “certainly shouldn’t be at current levels,” Alexander says.

There aren’t enough jobs being filled. Employers are hiring about 4.3 million people a month — before layoffs, dismissals and resignations. In 2007, before the Great Recession, they were hiring 5.2 million a month.

There are three unemployed people, on average, competing for each job opening, compared with 1.8 when the recession began in December 2007.

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