Visualization shows the difference between Unemployment and Labor Force Participation rates. It is interesting as Unemployment has varied much more widely, relative to Labor Force Participation, but drilling in a bit you see that the Labor Force Participation has been declining in the past 10 years. The data comes from the Bureau of Labor Statistics data portal.
This explanation from Investopedia captures why it might be important to look at Labor Force Participation rather than just Unemployment as a measure of the job market:
"Many economist argue the labor force decline is the result of low-skilled workers losing their jobs to outsourcing or automation, having no success finding new employment and therefore dropping out of the labor force entirely. For this reason, they feel the participation rate is a more accurate measure of the state of the job market than the unemployment rate, which only considers those in the labor force. An unemployment rate of 5% means only 5 out of 100 workers in the labor force are without jobs, but it does not consider those unemployed workers who have given up looking altogether, even though they want to work."
This explanation from Investopedia captures why it might be important to look at Labor Force Participation rather than just Unemployment as a measure of the job market:
"Many economist argue the labor force decline is the result of low-skilled workers losing their jobs to outsourcing or automation, having no success finding new employment and therefore dropping out of the labor force entirely. For this reason, they feel the participation rate is a more accurate measure of the state of the job market than the unemployment rate, which only considers those in the labor force. An unemployment rate of 5% means only 5 out of 100 workers in the labor force are without jobs, but it does not consider those unemployed workers who have given up looking altogether, even though they want to work."
