The unemployment rate fell again, hitting a three-year low of 8.1 percent. But, as the New York Times explains:
The unemployment rate ticked down to 8.1 percent in April, from 8.2 percent, but that was not because more unemployed workers found jobs; it was because workers dropped out of the labor force.
The share of working-age Americans who are in the labor force, meaning they are either working or actively looking for a job, is now at its lowest level since 1981 — when far fewer women were doing paid work. The share of men taking part in the labor force fell to 70 percent, the lowest number since the Labor Department began collecting these data in 1948.
Of course, if you are a glass-half full guy, you might interpret the numbers a bit differently:
“Today’s employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression”said Alan B. Krueger, chairman of the Council of Economic Advisers, “but much more remains to be done to repair the damage caused by the financial crisis and the deep recession.”
At what point are we going to stop looking at the unemployment rate as an indicator of economic health? If people keep dropping out of the labor force at this rate, we might simultaneously have “full employment” and new record lows in workforce participation just in time for election day.