U.S. labor force participation falls to a 50-year low outside the Covid era

The U.S. unemployment rate fell to 4.2% in June, but the decline was driven largely by people leaving the labor force rather than a broad improvement in hiring, according to Bureau of Labor Statistics data released Thursday. The labor force participation rate fell to 61.5%, its lowest level since March 2021 and, excluding the pandemic period, the weakest reading in 50 years. The household survey showed the labor force shrank by 720,000 in June, while the number of people counted as not in the labor force rose by 832,000. Economists said the drop was notable because it was driven by primeage workers as well as broader shifts such as retirements and possible discouragement among job seekers. The employmenttopopulation ratio also slipped to 59%, its lowest since October 2021, suggesting the labor market may be weaker than the unemployment rate alone indicates.