A good report today from the BLS on employment in October: the unemployment rate fell to 5.8% (from 5.9%) and employers' payrolls rose by 218,000.
The decline in labor force participation (which was at 66% in late 2007) has been one of the worrying trends of the past several years. It partly reflects demographics, though, as the population is becoming older and a larger portion of the population is of retirement age. Looking at the employment-population ratio for 25-54 year olds gives a picture of the labor market that takes out some of the guesswork in interpreting participation:
Moreover, while employment is improving, wages are still growing slowly - the BLS reports that average hourly wages have increased 2% over the past year. This suggests that there is still plenty of "slack" in the labor market.
The BLS' broader measure of un- and under-employment, 'U-6', which includes the "marginally attached" and people working part-time who want to be full-time, is at 11.5%, down from 11.8% last month (it peaked at 17.2% in April 2010).