Labor Force Shrinking at Slower Rate

Aaron Johnson

Wednesday, June 12th, 2013

Ben Casselman of Wall Street Journal’s Real Time Economics reports that the rate of labor force declining is slowing.  This is mainly due to an alternative measure of unemployment, that counts those underemployed, has declined from 14.3% to 13.8%.  Previously, a declining labor force can mislead people to think that a falling unemployment is a sign of an improved economy, which I described in “Why A Lower Unemployment Rate Is Not Always Good”.

Even though that’s a positive sign, do not expect the trend to reverse due to Baby Boomers retiring.

Screen Shot 2013-06-08 at 2.10.16 PM

Follow Aaron Johnson's blog and Twitter for more economic news and analysis.