The labor force participation rate was 66.0 percent in December. The rate has changed little recently, after trending down from early 2000 through early 2004. The recent trend in overall labor force participation reflects long-term structural and demographic shifts as well as more short-term business cycle fluctuations.
Looking at movements in labor force participation by age, the sharpest decline over the past several years occurred among young workers, both men and women. At 61.3 percent in December, the participation rate for those aged 16 to 24 was about 5 percentage points lower than in early 2000. The participation rate for men in this age group also had trended down in the 1990s, while the rate for women was little changed.
Since the beginning of 2000, participation also was for the 25- to 54-year age group. The participation rate for men in this age group decreased to 90.3 percent by the end of 2004, and has been gradually trending down since the early 1950s. After peaking at just over 77 percent in early 2000, the labor force participation rate for women 25 to 54 years old edged down to 75.2 percent by the close of 2004.
In contrast to the recent declines in participation among the other age groups, the labor force participation rate for persons age 55 and over continued to trend up. From early 2000 to the end of 2004, the rate for individuals in this age group rose by about 4 percentage points, to 36.6 percent.
To summarize the labor market data for December, nonfarm employment rose by 157,000, with increases in several service-providing industries. Employment gains totaled 2.2 million in 2004. The unemployment rate remained at 5.4 percent in December, down from 5.7 percent a year earlier.
---
If you would like to contact the Economics Guide you can do so by using the Feedback Form.
