On Monday’s broadcast of MSNBC’s “Morning Joe,” Steve Rattner, who served as counselor to the Treasury Secretary in the Obama administration, said that the decline in labor force participation in the September jobs report is “bad news because it means Americans are still not coming back into the labor force to the extent we wanted them to and expected them to as the economy recovered.” And lower labor force participation “means more pressure on wages, means more inflation.”
Rattner stated, “Democrats have an incredibly strong argument for the fall about what’s going on in the sort of real economy in terms of jobs. We had 263,000 jobs created last month. … And that follows three other months and many other months before that of very strong jobs creation. We have unemployment at the lowest it’s been since the 1960s…3.5%. And — but the problem is that the numbers came in a bit better than expected. You may think that’s good news. But it’s bad news. Which I’ll get to in a second. … And then the other number which we watch very carefully is how many Americans are actually out in the labor force looking for work or working, so-called labor force participation. And you can see that that ticked down a little bit last month, contrary to expectations of it remaining flat. And that’s bad news because it means Americans are still not coming back into the labor force to the extent we wanted them to and expected them to as the economy recovered. And we can all debate why that is. But fewer Americans in the labor force means more pressure on wages, means more inflation.”
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