The Stock Market climbed and the media rejoiced–the unemployment rate dropped to 7.5% in March–down 0.4 percentage points since January. At least it did not go up.
The New York Times reported yesterday that in spite of the fact that unemployment decreased and the economy added jobs, that since 2010 the number of Americans with jobs has stayed between 58.2 percent and 58.7 percent. Hot Air reported yesterday that the civilian workforce participation rate remained at a 34-year low of 63.3%.
Hot Air also reported:
…the number of people not in the workforce declined slightly in the Household data from March by 31,000. It’s still 632,000 higher than in February. Discouraged workers rose by 32,000 and marginally-attached workers rose by 21,000, both of which are relatively narrow shifts.
The New York Times reported:
Baby boomers are aging into retirement. Even before the recession, the government projected in 2007 that participation would decline to 65.5 percent by 2016, from 66 percent. But the April rate of 63.3 percent means the labor force has lost roughly five million additional workers.
Furthermore, the projections were wrong. Participation has actually risen among people older than 55. The decline is entirely driven by younger dropouts.
It is good that the unemployment number is down to 7.5%; however, we have a long way to go before we actually have a healthy economy. The two biggest challenges to the economy in the coming months will be the implementation of ObamaCare and the increased taxes that go with that implementation. We won’t really understand the financial impact of ObamaCare until late this year when people begin to plan for the tax rates of 2013 and when people begin to see ObamaCare directly affect their health insurance and health insurance premiums.
The article at Hot Air quotes Reuters:
Still, details of the report remained consistent with a slowdown in economic activity. Construction employment fell for the first time since May, while manufacturing payrolls were flat. The average workweek pulled off a nine-month high, but average hourly earnings rose four cents[.]
The New York Times article concludes:
There is always some unemployment. Millions of Americans are out of work at any given moment even in the best of times. But the economy is still roughly 10 million jobs short of returning to normal levels of unemployment and labor force participation. That’s a lot of missing jobs.
Some of those losses may be permanent. The number of Americans receiving disability benefits has increased by 1.8 million since the recession began, and people on disability rarely return to the work force, even if they would have preferred to keep working in the first place.
And as the economy improves, it is likely that labor force participation among older workers will finally begin to decline.
But the evidence suggests that the majority of the 10 million are just waiting for a decent chance.