As described in last week's post Unemployment: Even Worse than the Headlines, has the labor force not decreased over the month, unemployment would have jumped to a level higher than 9.8%
But how uncommon is a shrinking labor force? This is the first year over year decline since the early 1960's.
And why wouldn't individuals stop looking for a job. As the chart shows below, the number of people who have been unemployed longer than half a year has spiked to record levels.
And the long-term implications via Alan Greenspan.
"People who are out of work for very protracted periods of time lose their skills eventually. What makes an economy great is a combination of the capital assets of the economy and the people who run it. And if you erode the human skills that are involved there, there is a real and, in one sense, an irretrievable loss."Source: BLS