The American economy gained 216,000 jobs last month. We need 90,000 new jobs just to keep up with population growth, which means that net job growth clocked in at a moderate 116,000 jobs. The headline unemployment rate was unchanged at 3.7%.
This is a perfectly reasonable report, but the bad news is that December saw a huge exodus from the labor force. The number of employed people dropped by 683,000 and a total of 845,000 people left the labor force. These are seasonally adjusted numbers, so they aren't due to any kind of holiday hiring artifact.
As a result of this, the labor force participation rate went down from 62.8% to 62.5%. This is not a huge decrease by itself, but it's not a good trend.
How much is boomers retiring? I'm a boomer and there are lots of fellow boomers retiring all around me while I'm still employed at 68.
Yeah, with the new "normal" social security retirement now at 67 (and incentives to keep working going into your 70's), the tail end of boomer retirements has been pushed back a bit.
I was thinking the same thing. December may well be a popular month for people to retire, before the start of a new year, before the winter sets in, so they enjoy the holidays...
Yeah, my wife is planning on retiring next December. It avoids having to deal with another W2 during the next year's filing.
Boomer retirements seem like a logical cause.
As we move forward, I could see more people leaving the workforce to do elder care. Boomers dont have a lot of kids to split care duties between, and with the high cost of elder care, I can imagine more people dropping out of work in their 50s and 60s to take care of elderly parents.
A decrease from one month to the next is not a trend. Since January 2021, labor force participation rate overall has shown an upward trend - 61.2 to 62.5% - it's likely we are still not fully recovered from COVID.
It is also useful to note that labor force participation rate has been in a steady decline since 2000. Theories as to why are all over the place.
Boomers live longer
Only wealthy boomers who worked in cushy office jobs.
Most people want to work, but not at the jobs that they have.
If they get any opportunity to bail and still survive, they will.
With hundreds of thousands of jobs added month after month after month, Kevin somehow always manages to say it's no good and a recession is just around the corner.
I don't see any particular reason to regard people leaving the labor force as a bad thing. It is a bad thing when people leave the labor force during times of high unemployment because they just can't find a job, but at the current unemployment rate I have to surmise that anybody voluntarily leaving the labor force is doing so because they are financially comfortable enough that they don't feel a need to work.
Actually the numbers in Kevin's last two paragraphs are large and might be alarming if taken at face value. But the number of employed is extrapolated from a sample and the population value is also some kind of estimate, which appears to be adjusted at the end of the year. The statistical errors on these estimates are pretty large.
Which is why calling a one month decrease "a trend" is not a good analysis.
I'd call it an excellent trend if increasing numbers of people no longer need to engage in paid employment to have a good life. The more of us can do that, the less harmful will be the looming impact of AI on society.
This is a great comment.
In articles and commentary on ecomomic matters we often lose sight of what the point is.
Often the default good state of the economy appears to be everyone is working more hours for less money....but this is obviously not what most people want in their life.