The unemployment rate fell to 5.8% last week.

While this seems like good news, it doesn’t quite tell the whole story of what’s really happening in the labor market.

In simple terms, the unemployment rate is a measure of people who want to work but can’t find jobs.

Since employers are hiring aggressively in nearly every employment sector, the unemployment rate should continue to improve quickly.

But the underlying labor force participation rate tells a different story.

Before the pandemic (February 2020), 63.3% of the population was working.

During the lowest point during the pandemic, the participation rate fell to 60%.

It has bounced back, but only to 61.3%. This means that 4.2 million workers are still on the sidelines.

I covered the reasons individuals are reluctant to come back to work in a previous Insight (fear, childcare, government assistance), but all these reasons are temporary.

These workers will come back to work, but it won’t happen all at once.

And when they do come back, many will not return to the jobs they left.

There is a big shuffle going on as everyone tries to find their spot in the new employment marketplace.