One of the complaints regarding the current economic expansion is that labor force participation has been shrinking. Typically, one expects labor force participation to expand as an economy recovers since the likelihood of engaging in a fruitful job search increases. However, until recently, labor force participation was at a thirty eight year low.
The last months have been a time of rapidly expanding participation. According to the Labor Department’s survey of households, America’s workforce expanded by an astonishing five hundred and fifty five thousand people in February. Over the last three months, the labor force has expanded by more than 1.5 million people, the fastest pace in sixteen years.
In the words of writer Neil Irwin, the data indicate that this winter, many more people have been either working or actively search for work. The proportion of the adult population in the labor force is up half a percentage point since September.
Despite the uptick in people looking for work, national unemployment remains below five percent. This should be good for retailers since it implies expanding household spending power. It also suggests that the housing market should remain in recovery, including the market for apartments.
