Article Summary

According to the Bureau of Labor Statistics, the unemployment rate fell from 7.4 percent in July 2013 to 7.3 percent in August, and at the same time the labor force participation rate fell to its lowest level in 35 years, from 63.4 percent to 63.2 percent. The decrease in the labor force participation rate was due to a decline in the size of the workforce of about 300,000 people. A large portion of the job growth in August was in the food service and retail sectors, areas which typically account for part-time and lower-paying jobs. On a brighter note, the average number of hours worked per week rose slightly, as did average hourly earnings and temporary employment.

Source: Peter Coy, "Not Looking for Work: Labor-Force Participation Hits 35-Year Low,"BloombergBusinessweek, September 6, 2013.

Refer to the Article Summary.Explain how the labor force declining by 300,000 people could have led to the decrease in the unemployment rate.