The official unemployment rate fell in March because 496,000 people gave up looking for work and dropped out of the labor force, not because significant numbers of Americans found jobs. This was the largest one-month drop in the labor force since December 2009 and the largest drop in the month of March since March 1960 (-550,000). In fact, the survey that is used to calculate the unemployment rate showed that employment actually fell by 206,000 last month.
The March 2013 labor force participation rate (63.3 percent) is the lowest since May 1979. That was during the Carter Administration when the end of the disco era was marked by "Boogie Wonderland," "YMCA," and "Shake Your Groove Thing" topping the Billboard charts. If not for the 626,000 decline in the labor force in the last two months, the official unemployment rate would remain stuck at January 2013's 7.9 percent level.
Here are more facts about those not in the labor force:
The number of Americans age 16 and older who are not in the labor force (meaning they don't have a job and are not currently counted as looking for work) surged to a new record high of 89.967 million in March 2013.
The one-month increase in March 2013 of 663,000 new people "not in the labor force" is the largest increase ever recorded for the month of March (this data goes back to 1975).
In just the first three months of 2013, 1,128,000 Americans have been added to the ranks of "not in the labor force."
Throughout the Obama Administration, Americans have been dropping out of the labor force in droves, leading to a significant increase in the “invisible unemployed." If these “invisible unemployed” individuals were in the official labor force, they would be counted as officially unemployed – raising the current 7.6 percent official unemployment rate to 11.2 percent.
Sources: January 2009 Romer/Bernstein Report ("Administration Prediction With Stimulus Plan”), actual U.S. Department of Labor data and Ways and Means Republican staff calculations of "invisible unemployed." The “invisible unemployed” are defined as unemployed persons not included in official unemployment rate calculations because they are not currently in the labor force, compared with the month Democrats’ stimulus passed (February 2009). This includes people who quit looking for jobs since stimulus passed and dropped out of the labor force, plus other working-age adults who never entered the labor force, but presumably would have if the labor force participation rate was the same as when stimulus passed.