US Participation Rate Falls To 37-Year Lows

While the headline payroll numbers for September were positive, 248k vs 215k expected, and the August payroll number was revised much higher to 180K (from 142k), we are nonetheless very disappointed to see the participation drop to the lowest level since February 1977. The participation rate had stabilized since the beginning of the year. However, the latest reading dropped it to a new a low. We believe the structural decline in the participation rate will continue to depress inflationary forces and will continue to keep deflation on the minds of the Federal Reserve. While we are concerned to see the drop, we are not at all surprised by it. In fact, the CBO has projected that the participation rate is heading below 60% by 2040.