The unemployment rate held steady in March, but in a departure from the usual story in this recovery, that masked some good news. The share of the working-age population with a job ticked up by one-tenth of a percent—and the share of the prime-age population with a job, which is my favorite measure of labor market trends in recent years—ticked up by two-tenths of a percent. If more people were finding work, why didn’t the unemployment rate go down? Because more people came into the labor force. The labor force participation rate rose by two-tenths of a percent. The number of “missing workers”—workers who have left, or never entered, the labor force due to weak job opportunities—dropped from 5.7 million to 5.3 million. That is still a lot of missing workers (the unemployment rate would be 9.8% if they were counted as unemployed), and there is a great deal of month-to-month variability in the number of missing workers (meaning we can’t make too much of one’s month’s drop), but this is a step in the right direction.
Interestingly, most of the decline in missing workers in March was due to the increase in labor force participation of men under age 25. Men under age 25 had seen a steep decline in labor force participation over the prior five months, and March’s increase almost entirely reverses that decline. There are still 580,000 missing men under age 25, but again, March’s drop was a step in the right direction.