U.S. Labor Participation May Be Low for Years: Fed Study

Workers who have dropped out of the labor force may take a few years to begin searching for work, Federal Reserve economists say in a paper offering insights into the health of a labor market that’s key to central bank policy.

“In the current recovery, it will probably take a few years before cyclical components put significant upward pressure on the participation rate because payroll employment is still well below its pre-recession peak,” Leila Bengali, Mary Daly and Rob Valletta said in a report released today by the San Francisco Fed.