The Case of the Missing Workers
The job market recovery continues, sort of, though what it gives with one hand it takes away with the other. In Friday's Labor Department report for November, the U.S. unemployment rate fell to 7.7% from 7.9% in October, but mainly because another 350,000 workers disappeared during the month.</br></br>Call it the case of the missing workers. In the last year, employers have added an average of about 150,000 workers a month. In November they added 146,000, less 49,000 in downward revisions for the previous two months. Hiring grew at a healthy pace in professional services, leisure and hospitality, while falling slightly in construction and manufacturing.</br></br>Yet even as payrolls are rising, albeit slowly, the overall labor participation rate has continued to fall. In November, the share of the available labor force that is working fell to 63.6%, which is down from 65.7% when the recession ended in June 2009.</br></br>Mull that one over: Three years into an economic expansion, the labor participation rate has fallen two full percentage points and three times this year (including November) it has reached the lowest level since 1981. This means that about three million more workers were working or looking for work in 2009 than in November. In the last year alone, the number of working age nonworkers grew to 89.2 million from 86.8 million.</br></br>So why are more Americans sitting on the labor market sidelines even as job opportunities expand? One popular suspect last month is Hurricane Sandy, yet the Bureau of Labor Statistics concluded that the storm "did not substantially impact the national employment and unemployment estimates for November."