Economists have identified several reasons for a drop in labor participation, including the retirement of a large number of Baby Boomers — and general discouragement about employment prospects during and in the wake of the recession.
Generally, a tick up in the participation rate means the economy is drawing more workers to the labor market.
Overall, total non-farm payroll employment increased by 213,000 in June, and the unemployment rate rose to 4 percent, the federal report said.
Job growth was strongest in professional and business services, manufacturing, and health care, while retail trade lost jobs.
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The number of unemployed people increased by 499,000 to 6.6 million, a number some see as tied to the greater labor participation rate. A year earlier, the jobless rate was 4.3 percent, and the number of unemployed persons was 7.0 million, the bureau said.
“I know I sound like a broken record, but we continue to see steady demand for entry-level and above workers in manufacturing, logistics and customer service-call center” jobs, Tom Maher, owner of the Manpower of Dayton staffing franchise, said Friday.
Maher believes rising wages are starting to “entice” more people to search for work.
“This is a very good thing,” he said. “However, as the supply of available workers increases it may ... put a damper on the speed of the continuing increase in wages.”