Something odd is afoot in U.S. labor markets, says Paul Boltz of T. Rowe Price Associates Inc. One reason the jobless rate has climbed is an unexpected sharp acceleration in labor force growth.

So far in 1995, the labor force has jumped by more than 1 million, implying an annual increase of 3 million. In the history books, notes Boltz, only one year saw labor-force growth hit 3 million: 1978, when maturing baby boomers were flooding the job market. Since demographic trends are now less favorable, the recent acceleration looks odd.

Boltz also notes that the labor force surged in a similar fashion early in 1992. To the chagrin of the Bush Administration, a 1.63 million rise in the first half of that election year pushed up the unemployment rate to 7.7%. In the second half, however, the labor force grew by a paltry 200,000. If the same pattern unfolds this year, the jobless rate may fall again even as the economy slows.

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