Job-seekers return at fastest pace since before Great Recession

Associated Press

WASHINGTON

Americans are flooding back into the job market at the fastest pace since before the Great Recession, encouraged by steady hiring and some signs of higher pay.

The flow has halted, at least temporarily, one of the economy’s more- discouraging trends: the sharp decline in the percentage of people either working or looking for work. That figure fell last year to a four-decade low.

The pickup since then suggests that nearly seven years after the recession ended, Americans finally are more confident that they can find jobs.

In March, nearly 400,000 people began job hunts, though not all found work. Their searching lifted the unemployment rate to 5 percent from 4.9 percent. Employers added 215,000 jobs, the Labor Department said Friday, a solid figure but not enough to keep up with the new job-seekers.

Since last September, 2.4 million people have either found jobs or started looking. The proportion of Americans working or looking for work, known as the “participation rate,” has increased to 63 percent during that time, from 62.4 percent, a 38-year low.

“The rise ... over the past six months has been truly astounding, suggesting that the job market is finally pulling discouraged workers off the sidelines,” said James Marple, an economist at TD Bank.

Still, the participation rate was 66 percent before the recession began. The drop has fueled concerns that the recession rendered millions of Americans essentially unemployable, held back by deteriorating skills or a lack of available jobs nearby. The increase in the past few months provides hope that’s not the case.

Economists estimate that at least half of the decline in the participation rate is a result of ongoing retirements by the vast baby-boom generation. That demographic trend could overwhelm the return of younger workers, keeping the participation rate flat or pushing it lower in the coming months.

The extra job-seekers also give the Federal Reserve additional flexibility in the timing of future interest-rate increases, economists said. If employers have more potential workers to choose from, they won’t be forced to raise wages as quickly, a step that can push up inflation.