A significant decline in the participation rate had been expected, and probably half or more of the recent decline in the participation rate was due to changing demographics (and long term trends), as opposed to economic weakness.
A few key long terms trends include:
• A decline in participation for those in the 16 to 24 age groups. This is mostly due to higher enrollment rate in school (see the graph at Get the Lead Out Update). This is great news for the future and is possibly related to removing lead from the environment (see from Brad Plumer at the WaPo: Study: Getting rid of lead does wonders for school performance)
• There is a general long term trend of declining participation for those in the key working years (25 to 54). See the second graph below.
• There has been an increase in participation among older age groups. This is probably a combination of financial need (not good news) and many workers staying healthy or engaged in less strenuous jobs.
Chosen excerpts by Job Market Monitor. Read the whole story at Calculated Risk: Labor Force Participation Rate Update.