It now stands at 63 percent, the same level as in 1978, when a much smaller share of women were in the workforce. Lower participation could mean that the 6.7 percent unemployment rate is overstating the progress in the labor market. One factor lowering participation is the aging of the population, which means that an increasing share of the population is retired.
If demographics were the only or overwhelming reason for falling participation, then declining participation would not be a sign of labor market slack. But some “retirements” are not voluntary, and some of these workers may rejoin the labor force in a stronger economy. Participation rates have been falling broadly for workers of different ages, including many in the prime of their working lives.