Another 1.2 million people dropped out the US workforce in January, a record. If you add back in the 5 million people who have permanently dropped out the labor force, as reflected in the historical average workforce participations rates, the “implied” unemployment rate would be 11.5 percent and rising, not falling. (Free Republic)
White House Press Secretary Jay Carney explained that the number of people dropping out of the work force, which artificially depresses the unemployment rate, can be regarded as an “economic positive.”
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“A lot of that is due to younger people getting more of an education, which is an economic positive,” Carney said. He had been asked what would happen when people “inevitably” raise the unemployment rating with their return to the work force.
He also noted that “an aging population” going into retirement has contributed to the number of people dropping out of the work force.