The Economy & the Fed

Labor Force Participation Rate

The share of the population aged 16 and older that is in the labor force, meaning either working or actively looking for work. Retirees, full-time students and people who have stopped looking are outside it. The participation rate matters because the unemployment rate only counts people still looking: if discouraged job seekers give up, unemployment can fall even though no one found a job. A falling participation rate also means fewer workers supporting the economy, which is why an aging population pulls it down over time.

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