For most of an agonizingly slow recovery from the Great Recession, millions of out-of-work Americans huddled on the sidelines of the job market. Yet Friday's jobs report added to evidence of a long-awaited shift:
Some have grown confident enough to start looking for work.
The percentage of Americans working or looking for a job, though still historically low, rose for the third time in four months. It's now at its highest level since May.
Americans in their prime working years — ages 25 through 54 — are driving the improvement and offsetting powerful demographic forces pushing in the other direction. In particular, the vast baby boom generation is retiring, which is reducing the proportion of adults with jobs or looking for one.
This has created a "tug of war," says Joshua Shapiro, chief U.S. economist at forecasting firm MFR, Inc., between rising retirements and the employment opportunities created by an improved economy.
"The fact that we've stabilized now after a long decline suggests people are finally getting enticed back into the labor force," Shapiro said. The workforce includes both people who are employed and those looking for jobs.
Earlier in the recovery, increasing retirements and sluggish hiring were pushing in the same direction. The result: A sharp drop in the proportion of adults in the workforce. The unemployment rate fell. But the reason was nothing to cheer: With fewer people seeking jobs, fewer people were counted as unemployed.
Now, the trend is more promising. More people are looking for work. And the decline in the unemployment rate in the past two years — from 6.6 percent in January 2014 to 4.9 percent last month — has occurred mostly because people are finding jobs.
The overall improvement remains modest. The percentage of Americans working or looking for work ticked up to 62.7 percent in January, up from 62.4 percent in September, which was near a 40-year low.
Figures for those ages 25 through 54 are more hopeful: The proportion working or looking for work has reached 81.1 percent, the highest point in a year. And the percentage in that age bracket with jobs has reached its highest level since 2008.
In addition, Americans appear to have a modestly rosier view of the job market. Their perception of the availability of jobs has recovered to nearly its pre-recession level, according to the Conference Board's consumer confidence survey.
Felix Mirando, CEO of ARCPoint Labs, a chain of testing laboratories that focuses on drug and alcohol screening, has seen more resumes from people who have been out of the workforce rather than already employed.
Though many employers are reluctant to hire people with long gaps in their resumes, Mirando says he is opens to them.
The bulk of those jumping back into the mix in the past four months have only a high school degree or less. That likely reflects the strength of job growth in such lower-paying areas as retailers, restaurants and hotels. But many of those businesses are paying higher wages than in the past, either voluntarily or because of higher state minimum wages.
The pay increases could be a big reason more people are coming off the sidelines, said Tara Sinclair, chief economist at Indeed.com, a job search website.
On Friday, after the government issued the January jobs report, President Barack Obama highlighted the uptick in the workforce. But he also acknowledged that many Americans who have lost jobs in recent years lack the skills needed for the positions that are now available.
"I get a lot of letters from middle-aged workers who got laid off, aren't confident about their current skills, and so have not yet re-entered the workforce," Obama said. "They need to get retrained. And so that's a special group — folks in their late 40s, early 50s — still far away from retirement, but feel like they can't adapt.