While looking at the unemployment numbers is useful, an additional employment metric that is very interesting over time is the labor force participation rate, since the fudging of “actively looking for work” is not involved.  This series trended up because of the increase of women in the workforce through 2001, but is now back down to levels seen in the late 1980s!  We’re 3.6% below the level seen in the dotcom boom, which translates to about 8.5 million less people employed.  Moreover, the velocity of labor force participation decline in the last six months is particularly striking and does not look like it is approaching bottom.

Labor Force Participation Rate

chart by Mike McCarthy

The numbers on the chart are straight from BLS.  The 8.5 million number is a personal calculation though.  I pulled the civilian noninstitutional population of 235 million from Table C at BLS.   Multiplying 235 million by (64.6 – 61.0) = 8.5 million less jobs than the equivalent 2000 participation rate.

Category: Data Analysis, Digital Media, Employment, Markets

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5 Responses to “Labor Force Participation Rate”

  1. Dow says:

    Do you still believe the shadowstat of 17.5% unemployment is unrealistic?

  2. Bruce N Tennessee says:


    Love your blog. The people here seem less sarcastic, and certainly less cynical than some other sites. I will say, that as this thing has played out, I think I am coming down on the side of the fence that this is the beginning of a new depression. Having never experienced such a thing, I hope I am wrong. But I have lived through at least three pretty good recessions, and done well each time. I think it is different this time…I’ll give you a few thoughts.

    First, the speed and global uniformity of the downturn is the one most alarming element here. In spite of the fact that central banks are doing all in their power to stop this, the consumer and business are continuing what I think is best described as deleveraging. But in the end the deleveraging on this massive a scale, I think, brings us to depression. There is a term in physics called momentum. I think this downturn has it in spades…

    Second, the salt mine is pretty insulated against recessions. But the people I talk with daily are really scared this time, and I am seeing jobs disappear now (for the last 2 months) that I would have thought were bullet-proof. They are not. We have an enormous number of job applicants for jobs here. Many, many more than one year ago.

    I live in a retirement area. Builders are gone. Gone. Auctions of property are now commonplace, and this is only in the last 12 months.

    People in my children’s immediate in-law family, who have always had plenty and made plenty, are now seeing the writing on the wall. Honestly.

    My wife, who I review the economic news overnight with every morning for a few minutes before heading the the mine, has been convinced for 6 months this was a depression. I pooh-poohed this until just recently. Not anymore.

    Let’s hope I’m wrong.

  3. mike_mccarthy says:


    Thanks for posting this. The title of the chart should be Employment:Population ratio though. Labor Force Participation Rate is a different category from BLS that still has the “Labor Force” fudge factor, while Employment:Population Ratio is free of the fudge. I don’t want to anger the real economists by mislabeling things.

  4. ddk says:

    For what it’s worth, the bottoms on the chart never seem to have had much evidence of “approaching bottom.” They bottomed somewhat abruptly. So the current vertical drop is dire, but may not be predictive of how far further we have to go.

    End devil’s advocate note: yeah, we have far further to go. I just find this chart more reassuring than anything, since it shows abrupt reversals are possible. In past decades. In other circumstances. Whimper.