Labor force participation continued decline in February

Friday's Bureau of Labor Statistics report dropped with a thud, showing a loss of 92,000 jobs in February. ​But we took a closer look at the data to see what other signals it may contain of what’s to come: ​​One number, the labor force participation rate, jumped out. It ticked down to 62%, and was the lowest since December 2021, according to Indeed.

The labor force participation rate is the percentage of people over 16 who are either working or looking for work. The figure gives us a clue into how potential workers are doing, said Cory Stahle, an economist at Indeed.

“Are they feeling like there are the jobs for them to come into, you know? Are they feeling like it's worth it to have a job?” he said.

The jobs report doesn’t explain why so many people are not working or even looking for a job right now. One possible factor? “Older workers are leaving the labor force,” Stahle pointed out. “They're aging out of the labor force. They're choosing to maybe retire and leave and not participate.”

Or maybe workers are taking on more gig work, says Brian Bethune, a professional financial economist at Boston College.

“If you're in and out of the labor force, and you're not actively looking,” you wouldn’t necessarily show up in the participation rate, he noted.

Immigration policy could also have something to do with it, said ZipRecruiter labor economist Nicole Bachaud.

“Those kinds of dynamics are really challenging the available population who is willing and able to work,” she said.

It’s important to keep an eye on labor participation, Bachaud added, because there will still be a need for people who want to work, especially those with skills in areas like health care and construction