The unemployment rate came down again in the most recent employment report, dropping to 6.3% from the expected rate of 6.7%… this is a good trend, though there are a lot of details within the numbers.
Digging into the numbers, nonfarm payrolls increased by 49,000, which shows job growth, but the Labor Force Participation Rate (LFPR) also edged lower, meaning more folks left the labor force and are no longer looking for work. Many of those not looking for work would search for a job, given better employment prospects. The LFPR is a very important metric to watch and can factor into a scenario where a growing economy with increased hiring may still have a rising unemployment rate, as more disaffected workers jump back in the labor force.
In this report by economist John Robertson, one of the top policy advisors in the Atlanta Fed’s research department, read about some of the dynamics of the current labor force statistics, including the “shadow“ labor force that could come back looking for work if things improve.
The Federal Reserve Bank of Atlanta has the finest economic research department of the twelve Federal Reserve Banks, in my opinion. We have travelled with Atlanta Fed Research Chief Dave Altig and really enjoy the association with the Atlanta Fed.
The website for the Atlanta Fed also has a Labor Force Participation (LFP) tool that helps explain many of the nuances of how workers are counted within the labor force. The link is also below- Enjoy!
~ Brian Kasal- The Leadership Matrix
Click Here- Insights from the Updated Labor Force Participation Dynamics Tool
Click Here- Atlanta Fed LFP Tool
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