April Unemployment Data

The Department of Labor recently released its April unemployment data.  There was job growth of 115,000 and the unemployment rate dropped slightly to 8.1%, but this wasn't as good as many had expected.  However, the previous months' numbers were revised upward.

One interesting debate surrounding the unemployment rate, which will only heat up as the presidential race gets closer, is the labor force participation rate.  I never thought that would be a hot political topic, but it's a number that I've mentioned frequently with the unemployment data releases.  The participation rate is relatively low, which contributes to keeping the unemployment rate low.  The question is whether this is the result of discouraged workers dropping out of the labor market or as consequence of baby boomers retiring.  The answer includes both, but the degree of impact is unclear. Ibe theory is that retirements are a major piece of the participation rate, which means that we may not see the uptick in the unemployment rate that some have predicted when discouraged workers return to a healthier job market.  The Washington Post's Wonkblog has done a nice job following this issue. 

-JH