At face value, this fact seems to be a bit of evidence against the view that the payroll survey systematically undercounts some jobs that are being captured by the household survey. Bernanke (2003c) provides more discussion of the two surveys. 4  Conceivably, part of the decline in the participation rate could reflect factors other than simple discouragement.
However, I will proceed under the plausible assumption that most of the decline is a response to labor market conditions. BIS Review 23/2004  3  ongoing growth in output.