Labor Force Participation

This post is about a week early, as next week we will begin talking about unemployment. Nonetheless, The Federal Reserve Bank San Francisco published a recent letter discussing the future of declining unemployment rates is conditional on the movement of workers back into the labor force. During the recession a number of workers left the labor force. These workers went back to school, became stay at home parents, etc. They are discouraged workers. As the economy improves nearly six million workers will have to decide whether they want to reenter the labor force. The speed at which these workers find jobs will dictate the future unemployment rate.