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Weekly Market Insight
Civilian Labor Force Participation Rate

Seasonally Adjusted 		May 08, 2012

Sources: Bureau of Labor Statistics, Grubb & Ellis 		One of the more troubling aspects of the April Employment Situation report released on Friday was the labor force participation rate, which, at 63.6 percent, hasn’t been this low since December 1981. The highest participation rate since the Bureau of Labor Statistics began tracking it in 1948 was 67.3 percent recorded at the height of the dot-com boom, January through April of 2000. The rate at the peak of the last expansion cycle in December 2007 was 66.0 percent. Had the participation rate remained at 66.0 percent, the unemployment rate last month would have been 11.5 percent instead of the official rate of 8.1 percent. The participation rate has slipped because many of the jobless have become discouraged and stopped looking for work, and some have returned to school in hopes of finding a job when they graduate. Also, the labor force is aging along with the general population, and many who are close to retirement may be choosing that option, thus reducing the size of the labor force. In terms of leasing demand for commercial real estate, job creation arguably is a more important metric, but the labor force participation rate does speak to the slack in the labor force. Had the labor force participation rate remained consistent with its level at the start of the Great Recession, the current unemployment rate of 8.1 percent would have equated to another 5.9 million jobs, which would have driven demand for all types of commercial space.

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Robert Bach
National Director, Market Analytics
312.698.6754