Taking part

The US economy needs job-seekers, not just jobs. December job creation at 74,000 new positions as reported on Friday was weak. But an average of 182,000 jobs a month in 2013 equates to further steady recovery. The fall in the jobless rate to 6.7 per cent, however, is too flattering. Participation in the workforce is still sliding, and that will be a drag on growth.

Wintry weather was partly to blame for the low figure last month, perhaps most noticeably in construction, where 16,000 jobs were lost. And an upward revision of 38,000 jobs in November together with a modest decline in government jobs made the private sector picture look somewhat perkier.

The plunge in the unemployment rate by a stellar 0.3 percentage point - calculated from a different survey - augured much better. However, the combination of lackluster job growth and a drop in unemployment, only serves to highlight yet another slide in the labour force participation rate to 62.8 per cent.

That's equal to October's distorted figure; that aside, it's the lowest since 1978. The ratio of those employed to the total population flattened out in 2013, but has yet to turn up. There's a long way to go to regain the employment and participation rates seen before the crisis, and long-term joblessness remains stubbornly high.

This will hold back growth, both directly because too many people aren't working productively and indirectly through the burden of welfare claims on federal and state budgets. If labour force participation rates remain subdued, the Federal Reserve will probably not feel the need to raise interest rates when unemployment drops below 6.5 per cent - as the US central bank has said it might - because that reading won't signal a healthy labour market without increased participation.

Assuming December's total employment but a participation rate of 66 per cent, the fairly steady level prevailing from 2004 to 2008, the unemployment rate would have come in at around 11 per cent last month. Though the changing age profile of the US population may be partly to blame, that's a sign that the job market is still subpar. For the economy to thrive, workers must participate, actively seeking jobs and honing their skills. That demands smart policy as well as time.