BOTTOM LINE: The above chart(shaded areas are recessions) shows the current unemployment rate of 5.6% is below the average for any ten-year period during the last 30 years. However, many say that this number isn't relevant as the number of people dropping out of the labor force is rising. These people are said to be so discouraged that they have given up on looking for a job. A recent Business Week article suggests that this is not the case. The article says that almost all of the drop in labor participation is in the 16-24 age group, specifically the 20-24 year olds. The above charts verify this analysis. It is my contention that with American's net worth at all-time highs, more and more 20-24 year olds are attending college and graduate school, thus resulting in a lower labor participation rate by this age group.
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