Gene Epstein‘s latest “Economic Beat” column for Barron’s pours some cold water on optimistic assessments of the American economy.
“The unemployment rate is again steadily declining.” Yes, but at 7.9% in October it’s still way above anyone’s measure of full employment, normally set at under 6%. At the pace of decline from the October 2009 high of 10.0%, it would take nearly three years to achieve full employment, one of the slowest recoveries on record.
“The labor force is again steadily rising.” True, but the share of the population participating in the labor force is still disconcertingly low. The participation rate for prime-aged men, 25 to 54, stood at 88.7% in October, down from 90.4% in October ’08. In the 1950s and early 1960s, the participation rate for this group ran at 97%, which is about what one would expect for men aged 25 to 54. Even we lower that standard to, say, 95%, more than 3.8 million potential male workers are among the missing.
