Over 800K Americans drop out of labor force – My Budget 360

Over 800K Americans drop out of labor force – My Budget 360

It might have come as a surprise to many that the pumped up stock market had no rally from the big employment report last week. Why? The unemployment rate fell from 6.7 to 6.3 percent. One survey showed a big jump in jobs added. As is usually the case, the devil is in the details. The unemployment rate fell dramatically because more than 800K Americans dropped out of the labor force. That is right, nearly 1 million people dropped out of the labor force. So of course this will make the rate look better than expected. In fact, since the recession ended we have added 12 million Americans to the category of “not in the labor force” which trumps even demographic changes. We have discussed that many Americans have no economic means to even retire. What was also interesting in the report is that workers younger than 55 actually lost jobs in the April report. So it is no surprise that the stock market actually turned lower with the whopping jobs report after people dug into the data.