October 28, 2025
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Good morning! In today’s issue, we’ll dig into the all of the latest moves and highlight what they mean for you right now. Along the way, you’ll find insights you can put to work immediately
— Ryan Rincon, Founder at The Wealth Wagon Inc.
Today’s Post
Why the Labor Market Participation Rate Matters — And What’s Going On Now
You probably hear a lot about unemployment rates like “4.3%” and wonder what they really mean. But there’s another number that sometimes gets less attention — the labor force participation rate (LFPR). This number shows the share of people who are working or actively looking for work. It gives a fuller picture of how healthy the job market really is.
Right now in the U.S., the LFPR is about 62.3% for August 2025.
While the unemployment rate is low, the fact that participation is not higher signals some hidden slack in the economy.
What is the labor force participation rate?
The “labor force” = people who are employed + people who are not employed but assume they’ll actively seek work.
The LFPR = (labor force ÷ total working-age population) × 100.
If someone gives up looking for work- say because they feel no jobs are available- they drop out of the labor force and the LFPR falls.
So a low or falling LFPR could mean fewer people working and fewer people looking — which is not a strong sign.
Why you should care
Here’s why the participation rate is important (for you, your job, your plans):
It reveals hidden weakness: When LFPR is low, unemployment might look OK (because the jobless folks are fewer), but many people may simply have dropped out. That softens the job market.
Shows trends in workforce strength: A higher participation rate means more people are engaged in work or seeking it — which supports growth, wages, consumer spending.
Impacts wages & bargaining power: If fewer people are working or looking, employers may feel less pressure to raise wages. That’s relevant for anyone planning for raises or choosing careers.
Signals economic cycle phases: In a booming economy, people flock back to work and LFPR rises. In a weak economy, it can stagnate or decline.
What’s going on now?
Here are some key data points and trends for 2025:
The LFPR is around 62.3% for August 2025, up a little from 62.2% in July.
This is still down from pre-pandemic levels and well below the long-term average (~62.9%).
The unemployment rate is low (~4.3%) for August 2025.
But job additions have slowed. For example, in August total non-farm payroll employment rose by only 22,000 jobs in the U.S.
All of this suggests: the job market looks okay on surface (low unemployment) but has some undercurrents of weakness (participation low, job growth slowing).
What this means for you
Here are some actionable take-aways to keep in mind:
Career planning: If fewer people are actively working or seeking, competition for good jobs may increase. Building strong skills and staying flexible helps.
Wage expectations: A slow or stagnant participation rate may mean slower wage growth in some sectors — so don’t assume big‐jumps every year.
Portfolio thought: In an economy where labor is under-utilized, it may lead to slower consumer demand. That could affect stocks tied to big consumer growth (luxury goods, non-essentials).
Budget and spending: If the job market weakens, many households may face more pressure. Having a buffer/savings is wise.
Quick summary:
The labor force participation rate is around 62.3% in the U.S. in 2025 — lower than desirable.
This suggests some people have dropped out of the job market or are not seeking work, even though unemployment is low.
The result: the job market may be weaker than the headline unemployment number suggests.
For you: think broadly about your job, skills, and financial plans in light of this participation dynamic.
Final thought
It might seem odd to pay close attention to a number like 62.3% — but when you dig into what it means, you see it captures something powerful: how many people are engaged in the workforce. A healthy economy doesn’t just have low unemployment — it also has lots of people working or willing to work.
Right now, the U.S. is operating in a kind of in-between state. Unemployment is low, but participation is weak and job growth slowing. For readers of The Economic Wagon, that means one thing: it’s a good time to lean on flexibility, skill-building, savings, and keeping an eye on the broader signals — not just the ones on the front page.
Tomorrow we’ll shift to a fresh topic: perhaps “Why real estate dynamics are shifting in a low-growth economy” or “How inflation isn’t disappearing yet: the sticky floors of prices.” Stay tuned.
That’s All For Today
I hope you enjoyed today’s issue of The Wealth Wagon. If you have any questions regarding today’s issue or future issues feel free to reply to this email and we will get back to you as soon as possible. Come back tomorrow for another great post. I hope to see you. 🤙
— Ryan Rincon, CEO and Founder at The Wealth Wagon Inc.
Disclaimer: This newsletter is for informational and educational purposes only and reflects the opinions of its editors and contributors. The content provided, including but not limited to real estate tips, stock market insights, business marketing strategies, and startup advice, is shared for general guidance and does not constitute financial, investment, real estate, legal, or business advice. We do not guarantee the accuracy, completeness, or reliability of any information provided. Past performance is not indicative of future results. All investment, real estate, and business decisions involve inherent risks, and readers are encouraged to perform their own due diligence and consult with qualified professionals before taking any action. This newsletter does not establish a fiduciary, advisory, or professional relationship between the publishers and readers.