clock menu more-arrow no yes

Labor Sec. Tom Perez has an idea about why labor force participation fell

In an otherwise pretty positive April jobs report, one of the darker spots was a shrinking labor force. The number of Americans looking for jobs or working fell by more than 800,000. While that can signal people retiring or going to school, it can also include people just plain giving up on looking for jobs.

However, Labor Secretary Thomas Perez believes it was an issue of timing.

"What we tend to see, and this is my operating hypothesis of what's going on, this time of year we traditionally expect to see certain types of people flowing into the workforce, and those people are seasonal workers," he says.

The people seeking out that seasonal work start to ramp up their searches later in the month of April, he says. However, the survey week in which the government asks US households whether people are working fell as early as it possibly could have last month.

That's because the household survey week is the calendar week in which the 12th of the month falls. But the 12th landed on a Saturday, meaning households were surveyed from April 6-12.

"The people we would traditionally expect to see flowing into the workforce at this time have not yet entered the workforce," he says.

It's just one month's worth of data, so it's difficult, to say the least, to draw firm conclusions. Perez says he'll be watching next month's numbers closely, though. If people indeed decide to leave the labor force in greater numbers in the next few months — or if people enter in smaller and smaller numbers — then it could be a sign of big problems.