The nation added 288,000 jobs in April, the strongest monthly performance in two years. But for whatever reason, that was not enough to entice more people into the labor force. The share of working age population either employed or seeking employment fell in April for the first time this year, which helped to drive the unemployment rate down to 6.3 percent, the lowest rate since September 2008 when the financial crisis unfolded. The labor force participation rate now stands at 62.8 percent, which matches the lowest rate of participation since March of 1978.
As reported by Bloomberg, labor force participation didn’t fall because an unusual number of people left the labor market, but rather because an unusually small group of people entered it. The number of people leaving the labor force totaled 6.7 million in April, which is similar to the 6.4 million average over the previous 12 months. The number of people coming into the workforce either by landing a job or beginning a job search plunged, however, to 5.8 million April, the lowest tally since November 2008. One theory behind this is that the compensation associated with newly create jobs remains inadequate to draw many new people into the U.S. labor market