Women just broke a job-market record. That may be a warning sign.

By Hannah Erin Lang

Friday's jobs report showed a cooling labor market. But hiding in the data was one record-breaking stat about women in the workforce.

The percentage of women in the workforce has reached its highest level on record.

That's according to the August employment report released Friday by the Labor Department, which showed a sustained increase in women's labor-force participation.

The top-line data offered evidence of a labor market that has continued to cool, as few industries added jobs. But for women in their prime working years, the labor-force participation rate was at an all-time high.

Millions of women dropped out of the labor force after the pandemic took hold in 2020, according to Labor Department estimates. Working women were more likely to be employed in service sectors that were shut down by social-distancing rules, and many women were burdened with additional responsibilities at home as children attended school online.

But as the job market heated up, the percentage of women in the workforce started climbing again, and now 78.4% of U.S. women ages 25 to 54 are working - the highest figure ever recorded.

"I think that the story of women's labor-force participation rate after the pandemic is the story of what a really strong job market does for workers," said Kitty Richards, a senior strategic adviser at Groundwork Collaborative, a left-leaning think tank. "It brings people off the sidelines."

The labor-force participation rate measures the percentage of the working-age population that is working or actively looking for work.

It's hard to tell for sure whether a higher share of women in the workforce is a good or bad sign, explained Jeremy Horpedahl, an economist and the director of the Arkansas Center for Research in Economics. It could mean that better job opportunities and higher wages are pulling more workers into the market - or that more households feel stretched thin and need the extra cash.

His sense is that it's the former.

"Wages are now going up so quickly, especially the past year and a half, that some women who before might have said, 'Well, maybe I will stay home' - they look at what they can earn in the [job] market," he said.

Julie Kashen, the director for women's economic justice at the Century Foundation, a progressive think tank, thinks the data point means more American families are feeling financially strained.

"The cost of living is high, and they have to pay the bills," she said. "It's a combination of wanting to work and having to work."

Friday's jobs report showed that though the U.S. economy added jobs in August, the labor market has continued to cool. Some are worried it has slowed down a little too much, and that Federal Reserve officials have moved too slowly to cut interest rates in order to avoid a sharp rise in unemployment. The percentage of Americans who are out of work and actively seeking a job ticked down to 4.2%, from 4.3% the previous month.

If there is a future surge in unemployment, Richards said, women workers could bear the brunt of it.

"I worry that the Federal Reserve is already behind the curve. I don't want to lose sight of the fact that the labor market is softening, and that dynamic can spiral very quickly," she said. "That harms women and other workers who are on the margin of the labor market first."

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-Hannah Erin Lang

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09-07-24 0942ET

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