US participation rate

a piece of the job market puzzle to read the economy

how many Americans are part of the labor force?

Participation rate:

• has reached 62%, low, in the bottom range of 10-year observations REWORD
• its recent developments have been continued to trend down recently, both in the past quarter (-0.5%) and last month (-0.1%) REWORD
• has continued to trend down recently, both in the past quarter (-0.5%) and last month (-0.1%)
• In simple terms, Participation is low and moving lower. LINK UP WITH UNEMP

IntroThe labor force participation rate is a key indicator of economic health, as it reflects how many people (16 and older) are actively participating in the workforce either by working or actively seeking employment.

Long-term trendsBe aware that global labor force participation has shown a steady decline since 1990, clearly evident in US numbers too since 1999 (see chart).

Economic implicationsTaken together, the participation rate and the unemployment rate can provide a more comprehensive picture of the job market. A high participation rate combined with a low unemployment rate is a sure sign of a robust job market. Lower unemployment with lower participation, higher unemployment with higher participation rate offer mixed messages, while lower parfticipation and higher unemployment point out to upcoming troubles.

US job openings

a demand-side indicator of trends in US jobs

how tight is the labor market currently?

Current job openings:

• are very high at 6.95 millions
• have moved down (by 396k) in the quarter and up (by 396k) since last month
• The number of job openings is moving lower, indicating an economy that remains on the weaker side. REPHRASE

IntroJob openings is a statistic offering a forward-looking measure of unmet demand for labor in the US. In other words, it points to the portion of desired jobs that are unfilled in the US labor market.

How to read itA higher number of available jobs (to be compared against the unemployment rate) suggests workers have lots of options for new employment, which is a more favorable labor market for workers. From an employer's perspective, the opposite is true: many open jobs indicates greater competition for talent. Viceversa, lower openings evidently means less employment options for workers, more choices for employers.

Economic implicationsHigh job opening rates, especially when paired with low unemployment, tend to indicate a strong and growing economy. Faster wage growth normally follows. Conversely, a decline in job openings or a rise in unemployment can signal a slowing or shrinking economy. Lower wage growth normally follows.