Friday, June 01, 2018

Unemployment reaches lowest level in 18 years, however work force participation is dismally low.

Jobs Report Shows 3.8 Percent Unemployment, Lowest Since 2000 

Rod's Comment: This is great news. Also, wages are increasing and take-home pay. Trump's regulatory relief and the tax cuts and good governance at the level of the states can assumed to be contributing factors.  I don't want to throw a damper on good news; however, I think to a certain degree the party in power gets more blame for bad news than they deserve and more credit for good news than they deserve.  Economic statistics are impacted by many factors and there is a time lag between a policy change and economic impact so it is difficult to say with any certainty when policy changes effect out comes. Nevertheless, I am going to give Trump's policy and the tax cut some of the credit.

All economic news is not good however. The work force participation rate is only 62.7 percent.  One way to decrease the unemployment rate is to have more people just drop out of the labor market. The work force participation rate was lower in October 2015 when it stood at 62.5 and it had not been that low since October 1977. A factor prior to the late seventies was that women participated in the workforce to a lesser extend, many choosing to be full-time homemakers. While we should celebrate the lower unemployment rate, that should be tempered by the disappointing  low work force participation rate.  Why are so many people simply choosing not to work?  

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