U.S. Labor Participation Rate Continues Downward Trend

As the country has recovered from the Great Recession there has been concern about why the economy hasn’t recovered more quickly. Part of the reason is the decline in the labor participation rate .

After peaking in 2000, the labor participation rate has declined steadily. The rate is the percentage of people who are either employed or actively looking for work.

Since 2000 the labor participation rate has declined from 67.3% to 62.8% at the end of 2013 – a significant drop. While there is debate about the reason for the decrease, the primary factor is an increase in discouraged workers (a weak recovery) and a change in demographics (more baby boomers retiring).

labor participation rate trends downward
After peaking in 2000, the labor participation rate has trended downward.

 

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