Reiterating a point: job market

There are less people looking for jobs, and that is the biggest contribution to the low unemployment rate. Ask the fed (via DeLong):

All of the improvement in participation rates during this recovery has come from people over 55, as more relatively healthy Baby Boomers enter this cohort. At the same time, participation rates for teenagers have fallen to 44% after averaging more than 50% during the 1990s boom. If labor force participation rates had improved as much during this recovery as typical, between 1.6 million and 5.1 million more people would be in the labor force, Bradbury concluded. If those people were counted in the labor force but not working, the jobless rate would have been somewhere between 6.5% and 8.7%, rather than the 5.4% reported by the Labor Department in the three months from November 2004 to February 2005. "An 8.7% unemployment rate would represent considerable slack in the labor market," Bradbury said.