Labor Market Participation Rate Continues to Slump

April jobs report also shows employment falls and businesses boosted more head counts than expected.

Friday's job report from the Labor Department was generally positive: Employers beat economists' expectations by adding the most jobs in April than any time since January 2012, and the unemployment rate fell to the lowest level since 2008.

The labor force participation rate, however, which measures the share of Americans older than 16 who are actively looking for work or who have a job, declined to 62.8 percent, matching its January level, which was the lowest since 1978. Some economists attribute the falling labor force participation to the increasing number of older Americans who are retiring every year.

'We don't view the drop in the participation rate as anything significant. It's really driven by demographics more than anything else,' John Canally, economist and investment strategist at LPL Financial Corp., said before the report. 'If you look back and think about it, the participation rate has been falling for 15 years and will continue to fall for the next 15 years as the baby boomers age.'

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