My first question is where are all the workers going - are they all just giving up? Right now, as a market participant myself I am having trouble what to make of this data.

In response to the latest US job numbers (which show unemployment declining because people are giving up looking for jobs, rather than people finding jobs), the BBC interviewed a market analyst who produced this quote. It seems like a really good question - what happens to these workers who stop looking for jobs?

I can’t imagine that they’ve all just given up and decided to seriously scale back consumption (because government assistance doesn’t really provide sustainable income levels), nor that they’ve all rounded up the cash and/or credit to go back to school (a favourite unsubstantiated narrative for the Canadian media) or take care of family members full-time. Are hundreds of thousands of people suddenly working under the table, so that their employers can avoid taxes or benefits? Are these discouraged workers somehow misunderstanding the survey question en masse?

I really don’t understand what’s going on here, so any possible partial explanation would be appreciated.

Source: BBC