Participation Explanation
Markets breathed a sigh of relief after last Friday’s monthly US jobs report was released. It showed that non-farm payrolls increased by 531,000 – which was more than expected – and that the unemployment rate fell to 4.6% in October from 4.8% in September. However, one feature of the US labour market that is stubbornly refusing to improve is the participation rate. This statistic records the proportion of people of working age who are either employed or actively looking for work. In this flash note Daniel Murray assesses why the participation rate remains lower.