Although Unemployment Dropped In March, Job Growth Slowed The March unemployment report disappointed analysts with very weak job growth, and perhaps more significantly, a huge drop out in the labor force.

Although Unemployment Dropped In March, Job Growth Slowed

Although Unemployment Dropped In March, Job Growth Slowed

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

The March unemployment report disappointed analysts with very weak job growth, and perhaps more significantly, a huge drop out in the labor force.


It's ALL THINGS CONSIDERED from NPR News. I'm Audie Cornish.


And I'm Robert Siegel.

At first blush, it might seem like good news from the Labor Department this morning: The unemployment rate that has been dropping in recent months fell again. It fell to 7.6 percent in March. But job growth was much weaker than expected. And the main reason that the rate went down is that a large number of people decided to leave the workforce. NPR's Yuki Noguchi joins us now. Hi, Yuki.


SIEGEL: And explain how this works. How many people had to give up looking for work - leave the workforce, that is - for the rate to come down with such weak job creation?

NOGUCHI: Well, a large number did last month, half a million, and so that is the primary reason why you saw the jobless rate fall. We did add 88,000 jobs, but it wasn't because we added jobs that the unemployment rate fell. It fell because of the thing you mentioned - again, the workforce shrinking.

It has to do with the way the jobless rate is calculated and then who is included in the workforce. So the calculation is roughly that you take the number of unemployed people and divide it by the workforce. Now, the workforce includes people who are working and people who don't have jobs but are still looking.

So when you have a decline as big as we did last month in the workforce, you know, obviously it takes some numbers out of the numerator and the denominator. So it changes the fraction.


NOGUCHI: But it also takes a proportionately bigger bite out of the numerator. And so, you know, basic math will tell you that that will help the ratio, but it makes it look better than it actually is.

SIEGEL: Let's focus on the big, big drop in the number of people in the workforce. Almost half a million people left. Do we know who they are, if there's any particular demographic group that's giving up the search for work?

NOGUCHI: Well, this is a fascinating question. I mean, I think it's a big question for which there aren't hard numbers. Baby boomers are retiring, and they are retiring faster than the younger generation is entering the workforce. Economists I've talked to estimate that retirement accounts for about a third of the departures from the workforce.

Another third or so are people who have given up on finding a job. And so they go back to school, or they take care of their children or their elderly parents. And the rest may be just relying on their spouses or other family, and some number end up getting also disability insurance.

But the truth is we don't have a precise breakdown of what this population looks like and, for that matter, if and when they might re-enter the workforce.

SIEGEL: OK. Well, given the decline in the workforce - that is, the people who are either working or looking for work - how does this stack up historically? How bad is it these days?

NOGUCHI: Well, in the arc of history right now is not so good. I mean, a number that I find easy to understand is the employment-to-population ratio. That gives you an overall snapshot of the percent of Americans who are working. That has declined, also last month, to 58.5 percent.

And previous to the last recession, the last time we saw levels that low was in 1983. And, of course, fewer women were in the workforce then. So that's pretty sobering.

SIEGEL: OK. Thank you, Yuki.

NOGUCHI: You're welcome.

SIEGEL: That's NPR's Yuki Noguchi.

Copyright © 2013 NPR. All rights reserved. Visit our website terms of use and permissions pages at for further information.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.