America's workforce shrinks by over 1 million in a year as July jobs report disappoints
What happened
The number of Americans who are working or looking for work — the labor force — has fallen by more than 1 million people over the past year.
Participation rate at a low point
The share of Americans who are working or job-hunting has dropped to its lowest level since the pandemic.
A rough July jobs report
The broader July jobs report also came in weak, adding to concerns about the labor market.
What comes next
Economists and policymakers are watching upcoming reports to see whether the decline continues.
America has over 1 million fewer workers than a year ago
📰 Full story: America's workforce shrinks by over 1 million in a year as July jobs report disappoints
The number of people working or looking for jobs in the US has dropped sharply.
💡 The gist
- The US labor force shrank by more than 1 million people in one year.
- The share of people working or job-hunting is at its lowest since the pandemic.
- July's jobs report showed several other weak numbers too.
In the United States, people who have a job, or who are actively looking for one, are counted as part of the "labor force." Over the past year, this group got smaller by more than 1 million people. That is a very large number, and it caught the attention of economists who study jobs.
Why is this happening? Part of the answer has to do with a number called the labor force participation rate. This rate measures how many people, out of everyone old enough to work, are actually working or searching for work. Right now, that rate is at its lowest point since the pandemic. The pandemic was a time when many people had to stay home, and some stopped working altogether. Seeing the rate this low again is something economists have not seen in years.
When the participation rate drops, it can reflect several kinds of changes among working-age people — such as some choosing to retire, some giving up a long job search, or others stepping back for personal reasons. The report itself does not break down the exact reasons behind this year's drop, but it does confirm that the overall share of people working or job-hunting has fallen sharply.
On top of the shrinking labor force, the wider July jobs report also came in weaker than expected in other ways. Taken together, these numbers paint a picture of a job market that is cooling down.
People who watch the economy for a living will be paying close attention to the next few jobs reports to see if the labor force keeps shrinking.
America has fewer workers now
📰 Full story: America's workforce shrinks by over 1 million in a year as July jobs report disappoints
Over 1 million people left the job hunt this year.
Lots of people in America have jobs. Some people look for jobs too. That group got smaller this year. It shrank by more than 1 million people. That is a huge number of people. Fewer people are working or looking for work. This is the lowest it's been since the pandemic. The July jobs report had other bad news too. Grown-ups who watch money are paying close attention.