It is difficult to find the cloud in the silver lining as economists are often wont to do. It leaves no doubt about the December meeting being live despite the year-end considerations that some had seen tying the Fed's hands.Uh, actually not so difficult after all...
The blue line in this graph tracks the overall, seasonally adjusted Civilian Labor Force Participation Rate. In creating the graph from the St. Louis Federal Reserve's web site, I chose to start at June 1977 because the rate then was the same as it is today (as shown on left side Y axis).
The blue line is often explained by appealing to the retirement of the Baby Boomers. Unfortunately the red line blows that explanation right out of the water. The red line is the Labor Force Participation Rate for those 55 and over. If had been able to plot the Federal Funds Rate on this chart by norming the Y axis interest rate percentages to the labor force participation percentages, my hunch is that we would see a tight correlation between dropping interest rates and increasing labor force participation on the part of those over 55. This should not be hard to understand: potential retirees know full well that their savings will not last at current interest rates.
It is the green line - Labor Force Participation Rate for those 25-54 - that explains the blue line. Both track roughly together at their respective levels.
To gauge the overall trend, the numbers from the BLS can be plotted in a spreadsheet (I took only the 25-54 and 55+ age groups as a sample), totalled and then each year's percentage gain plotted as a series. Here is the graph:
The yellow series on top is the percentage share of job growth among those 25-54 years old. In January 2005 it was above 80%. It has dropped to below 75% today. The blue series is the same share of gains for those above 55. It was below 20% in January 2005. It is now above 25%. This is not the trend of a healthy economy. It is certainly not a silver lining without a cloud.