As I have been pointing out, the plunging labor force participation rate has been distorting the true picture of the labor market. But economist Mike Darda of MKM Partners has a way of getting around the demographic issue by only focusing on folks during (what should be) the prime of their working life:
One of our favorite measures is the employment-to-population (E/P) ratio for prime-aged adults (25-54), which is not adulterated by labor force dropouts or demographic trends, both of which can, and have, disturbed the unemployment rate. In April, the prime-aged E/P ratio slipped to 75.7 from 75.8. However, this ratio is up 0.9 percentage points in the last six months and 0.6 percentage points in the last 12 months. With the pre-crisis average close to 80, the current pace of improvement would equate to the achievement of a full employment level sometime between 2016 and 2019. It may take even longer for other measures of labor market slack to return to normal, such as the median duration of unemployment and the fraction of workers unemployed for 26 weeks or longer.
More evidence that America isn’t working.