Posted on by Californiacontrarian

Labor Force Participation

This is something that you will not hear about on MSNBC or CNN, and guaranteed that it will not make the front page of either NYT or WaPo. However, consider yourselves fortunate as I am going to explain Labor Force Participation(LFP).
LFP is defined as the percent of the population aged 16 and over working or looking for work. It is important as a gauge of how fast the economy is growing, and whether or not inflation will be generated. The Labor Force Participation (LFP) bottomed out in 2015, and since then it has stabilized at around 63%, defying expectations. According to the Wall Street Journal on 3/25/19, in the past six months the number of people outside the labor force has fallen by one million, the largest decline on record, and probably because the number of job openings and the rising wages have drawn in more workers in their prime working years, 25 – 54 years old. According to economist Ernie Tedeschi of Evercore ISI, the increase in this age group’s labor participation is from workers who had reported disabilities or were discouraged and are now seeking employment. What makes this all the more noteworthy is that this present LFP is running contrary to the predictions of the Labor Department, the Federal Reserve, and the Congressional Budget Office, all of whom had projected a decline mainly due to the aging of the population, as only 20% of Americans 65 or older work or look for work, and this should lower the overall LFP.
Now I realize that some of you are finding this economic drivel boring, but let’s take a step back, and review:

LFP bottomed out in 2015. 

LFP is defying expectations of demographic-driven decline.

LFP is running much better than had been predicted by the experts.

Why is this? Why will MSNBC and CNN not mention Labor Force Participation?

Duh!! It is because the present outstanding LFP is due to the policies of President Trump. While the Democrats have been caterwauling about Russia, etc., etc., Mr. Trump and his team have been doing things to help the economy. Prior to the 2016 election the prior president was talking about the “new normal” of slow economic growth, but oh, how things have changed since Donald Trump was elected. Coincidence? I think not! As an aside I wonder if ex-President Obama ever sits in his new D.C. home, looks at the present economic data including LFP, and considers if he and his policies were wrong! . . . BTW I would not spend too much time giving this serious thought! In the same vein do not hold your breath waiting for any of the vast herd of presidential candidates from the Democratic Party to mention economics, much less LFP, as they appear to have no idea of what the term implies in the real world!

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