Fed Policy Isn't Luring More Americans to the Workforce Just Yet

The rebound in the labor force participation rate could be counted among the Federal Reserve's biggest victories in recent history. The 2.4 million net additions to the labor force since the participation rate troughed in September constitutes the biggest six-month percentage gain since 1984, Societe Generale senior U.S. economist Omair Sharif notes.

The resurgence stands in stark contrast to the longstanding labor market trends that have defined this recovery. The halving in the unemployment rate since 2009 has occurred amid a tumbling participation rate, which sits at levels not seen since the late 1970s. While the aging of the population has been the dominant driver of this retreat in participation, detractors have pointed to the trend as a sign that the U.S. recovery has been weaker than commonly advertised. Economists expect the labor force participation rate to remain unchanged at 63 percent on Friday when April's non-farm payrolls report is released, which is 0.6 percentage point higher than in September.