A Positive Sign For Labor Force Growth

Jared Bernstein reflects on the latest jobs report and comments on some of the “critical labor market trends that need to be examined more closely.”

“To my mind, the most important labor market question is how much can stronger growth repair the damage to the labor force participation rate.”

“Those of us concerned about these dynamics were happy to see the pop in the labor force participation rate last month, though of course no one should make a big deal out of one-month result like this.”

“Here, however, is an interesting and favorable trend. It’s from the labor force flows data, which tracks people’s monthly movements in and out of employment, unemployment, and not in-the-labor-force (or NILF; remember, if you’re looking for work, you’re unemployed; if you give up the search, you’re NILF). This line shows the share of the population moving from unemployment to NILF, and is thus a driver of the decline in the labor force.”