(Bloomberg) -- The share of Americans between the ages of 25 and 54 who were either employed or actively looking for work surged to a 23-year high in July, offering a silver lining in an otherwise negative monthly jobs report.
Labor force participation for so-called prime-age workers rose to 84%, the highest since 2001 and close to all-time records reached in the late 1990s. That came as the unemployment rate for all workers rose to 4.3%, which raised concern that cracks are forming in the labor market.
An increase in the participation rate helps explain some of the rise in the unemployment rate. It could be a sign that more people are rejoining the workforce because of optimism they can find a job, thereby increasing the pool of unemployed workers.
“Typically, in a recessionary labor market, the labor force shrinks, as disappointed workers give up on their job search, but employment shrinks even faster,” Stephen Stanley, the chief economist at Santander Capital Markets US, said in a note. “That is not what we are seeing.”
The participation gains were largest among prime-age men, whose rate rose to 90%, the highest since 2009. The rate for prime-age women rose to 78.1%, matching a record reached earlier this year.
Prime-age Black men, in particular, have entered the labor market at a rapid clip in recent months. Their participation rate climbed to 86.1% in July on an unadjusted basis, up from 84.4% in the same month last year. That marked the highest level in more than 25 years.
The share of White men in the labor market rose above pre-pandemic levels for the first time, increasing to 90.7%.
Increases in prime-age participation weren’t seen by all groups. The share of Hispanic or Latino workers either employed or looking for a job dropped in July. That group also saw the biggest increase in unemployment, to 5.3% from 4.9%.
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