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Unemployment Decline Masks U.S. Labor Force Drop: Economy

BusinessWeek (02/08/12) Alex Kowalski

Although the U.S. unemployment rate fell to a three-year low of 8.3% in January, the U.S. Department of Labor reports that the number of working-age people in the labor force hit a 29-year low. The working-age population rose 1.51 million, but 83% of those people were not in the work force. The work force participation rate tumbled to 63.7% in January, as 88 million people age 16 and up were unemployed and not seeking work.

Even so, some U.S. Federal Reserve officials, including James Bullard, president of the Federal Reserve Bank of St. Louis, view the economic data as favorable, and staffing firms have reported growth since the end of 2009. Carl Camden, president and chief executive of the staffing firm Kelly Services Inc., says, “The ongoing economic uncertainty will help create a greater awareness of temporary staffing benefits and a secular shift in demand for temporary workers.”