Via the Financial Times:
The US is losing its edge as an employment powerhouse where the vast majority of people have a job or are looking for one, after its labour participation rate fell behind the UK’s for the first time since 1978.
The diverging trends between the US and the UK come as central bankers in both countries try to understand the dynamics in their respective labour markets, a critical factor in how long they should keep interest rates at record lows.
The labour force participation rate – the proportion of adults who are either working or looking for work – started to decline in the US in 2000 and has plunged since 2008 from 66 to 63 per cent. The equivalent of 7.4m people are no longer part of the labour force. Yet participation in the UK has held up remarkably well in spite of the country’s prolonged downturn and now stands at 63.6 per cent – the first time in 36 years it has been higher than the US rate.
Read the entire article here.