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Evan Horowitz | Analysis

A puzzling detail in Mass. jobs report

The labor market in Massachusetts is getting better, according to the numbers that came out this morning. The unemployment rate for May fell from 6.0 percent to 5.6 percent, which is a substantial drop. What is more, there were 9,100 new jobs created, and the share of the population with jobs continued to increase. Yet, even though it’s getting easier to work, fewer people are trying to find jobs.

In a really strong labor market, you’d expect an increase in the number of people looking for work. Think of the many people who are deciding whether to join the workforce, as opposed to going back to school or staying home with family. When it’s easy to find jobs, these people are more likely to work. Conversely, if no one is hiring, they won’t bother with a job search. The puzzling thing about this month’s numbers is that the job situtation is improving but people still aren’t looking for work.

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It’s hard to say for certain what is causing this drop in the size of the labor force, but here are three possibilities:

■ Our population is getting older. With more and more retirees, the number of people looking for work should decline. The trouble with this answer is that the numbers don’t quite add up. There just aren’t enough retiring baby boomers to have this big an impact.

■ A labor force expansion is just on the horizon. Perhaps people are only now beginning to feel the improvement in the job market, so we should expect an influx of job seekers in the coming months.

■ The job market isn’t as strong as it seems. Each month of good news makes this less likely, but it still can’t be ruled out.

Moving forward, it is worth keeping a close eye on the size of the labor force. If the job market really is improving, as many of the other indicators suggest, we should start to see more people looking for work.

Evan Horowitz digs through data to find information that illuminates the policy issues facing Massachusetts and the United States. He can be reached at evan.horowitz@globe.com. Follow him on Twitter @GlobeHorowitz
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