Friday, December 2, 2011

Labor Force Participation Rate

The unemployment rate fell to 8.6% in November led by a drop in the labor force participation rate to 64%, which is the lowest that it's been since 1984; it peaked in 1997 at 68.1%.

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Breaking down the participation rate into gender components reveals one of the more interesting hidden dynamics within the US labor market: the divergence of male and female participation in the post war era.  GDP per capita benefitted in the latter part of the 20th century from a rising labor force participation rate driven by more women entering the workforce.  This driver has leveled since the late 90s though, and coupled with the long term secular decline in male participation provides yet another headwind to GDP growth.

The US still has one of the highest labor force participation rates in the world.

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