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If the Administration Thinks a Growing Labor Force Is a “Great Sign,” What Does It Say about Today’s Shrinking Labor Force?

February 04, 2011

THEN  (April 4, 2010):
Administration officials say growing labor force is “a great sign.”
Behind the high unemployment rate, “there’s just been a tremendous increase in the labor force,” Christina Romer, chairman of the president’s Council of Economic Advisers, said on NBC’s ‘Meet the Press.’  “Over the last three months, we’ve added more than a million people to the labor force. And that’s actually, that’s a great sign,” Romer added. “That’s a sign that people that might have been discouraged dropped out because of the terrible recession, have started to have some hope again and are looking for work again.”

NOW  (February 4, 2011):
What will the Administration say now that the labor force is shrinking? 

Data reveal large declines in the labor force since the March 2010 data Romer discussed in the quote above, with especially steep drops in the last two months.  According to the Bureau of Labor Statistics, the labor force has shrunk by 709,000 since March 2010.  Given this unpleasant reality, will the Administration now say this trend is a “not great sign” indicating people have “lost hope again”?  Doubtful.