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Drop in U.S. Jobless Rate Sign of Demo Shift - Bloomberg
The drop in U.S. unemployment so far this year may be an early glimpse of what’s to come as the workforce ages.
The jobless rate, which was 9.4 percent in December 2010, declined to 8.6 percent last month, according to Labor Department data issued Dec. 2. The report also showed payrolls have climbed by 132,000 a month on average in 2011, around the pace most economists say would keep the rate stable as the population grows.
At play is a decline in the share of the working-age population, known as the participation rate, meaning that the economy needs to create fewer jobs to bring down unemployment. While some of the decrease has been caused by discouraged workers dropping out of the labor force, another driver is that the baby-boom generation is starting to move into retirement, according to economist Dean Maki.
“Demographic forces are the single biggest factor pushing the participation rate down,” said Maki, chief U.S. economist at Barclays Capital Inc. in New York and a former economist at the Federal Reserve. “This is a bit of a slow-moving drama but it’s likely to become more important in coming years.”
The drop in U.S. unemployment so far this year may be an early glimpse of what’s to come as the workforce ages.
The jobless rate, which was 9.4 percent in December 2010, declined to 8.6 percent last month, according to Labor Department data issued Dec. 2. The report also showed payrolls have climbed by 132,000 a month on average in 2011, around the pace most economists say would keep the rate stable as the population grows.
At play is a decline in the share of the working-age population, known as the participation rate, meaning that the economy needs to create fewer jobs to bring down unemployment. While some of the decrease has been caused by discouraged workers dropping out of the labor force, another driver is that the baby-boom generation is starting to move into retirement, according to economist Dean Maki.
“Demographic forces are the single biggest factor pushing the participation rate down,” said Maki, chief U.S. economist at Barclays Capital Inc. in New York and a former economist at the Federal Reserve. “This is a bit of a slow-moving drama but it’s likely to become more important in coming years.”