In the report The New Sick-onomy? Examining the Entrails of the U.S. Employment Situation, Daniel Alpert asks: “The official (U-3) unemployment rate has fallen to 7.6 percent from a recession high 10 percent in October 2009. Clearly, America is on the mend . . . right?”
An answer lies in the comparison of declines in the U-6 and U-3 employment rate numbers. The U-6 has declined 16.4% since the peak in October 2009. In contrast, the U-3 has declined 24%. The difference is due to a decrease in the labor force participation rate; that is, retirement. Yes, people are leaving the workforce. No the economy is not stronger for most Americans.