The rebound in the labor force participation rate could be counted among the Federal Reserve’s biggest victories in recent history. The 2.4 million net additions to the labor force since the participation rate troughed in September constitutes the biggest six-month percentage gain since 1984, Societe Generale senior U.S. economist Omair Sharif notes.

The resurgence stands in stark contrast to the longstanding labor market trends that have defined this recovery. The halving in the unemployment rate since 2009 has occurred amid a tumbling participation rate, which sits at levels not seen since the late 1970s. While the aging of the population has been the dominant driver of this retreat in participation, detractors have pointed to the trend as a sign that the U.S. recovery has been weaker than commonly advertised.

Economists expect the labor force participation rate to remain unchanged at 63 percent on Friday when April’s non-farm payrolls report is released, which is 0.6 percentage point higher than in September.

On the surface, this pickup in participation seemingly supports Fed Chair Janet Yellen’s claims that the unemployment rate overstates the health of the job market and that cyclical weakness, a legacy of the financial crisis, continues to drag on labor force participation. The narrative here is that a hot job market can lure people on the sidelines to search for gainful employment.

Such an assessment isn’t borne out by the data, Sharif contends. The key dynamic that’s changed in the U.S. labor market isn’t that more people are entering the work force on a monthly basis, he says, but that fewer people are leaving.

Throughout this cycle, flows into the labor force and flows out of the labor force have tracked each other fairly closely. But while the six-month moving average for flows into the labor force has remained relatively steady recently, moving up modestly, the number of people leaving the work force has tanked:

“If the labor force was growing because more people were entering the workforce, then the downward trajectory of the participation rate could be arrested for some time, especially given the large pool of potential workers outside the labor force,” the economist explains. “However, if the rise in the labor force is mostly due to fewer people exiting the labor market, then the increase in the participation rate is likely to prove short-lived, especially if those holding onto their jobs, or searching for work, longer are in older age brackets.”

The (admittedly limited) history of labor force flows shows that a tightening job market hasn’t drawn people into the work force. Given the severity and nature of the recession, the Fed’s theory that this recovery would have uncommon characteristics from what followed other postwar downturns-specifically, that trends in labor force flows would be different this time-can’t be dismissed out of hand. While this hoped-for influx in participation may come to pass, Sharif’s analysis shows it hasn’t happened just yet.

It’s unclear what’s driving the drop in exits from the labor force. Perhaps some baby boomers are stuck in a job for longer than they intended, in order to build up an adequate nest egg, in part because of the hit to net worth endured amid the financial crisis. Conversely, perhaps labor shortages in certain sectors mean the most senior employees now receive enhanced compensation, enticing them to delay retirement.

What is clear, according to Sharif, is that the aging population will soon begin to exert a dominant influence on the headline participation rate, dragging it down.

“The recent rise in the participation rate is likely to be overwhelmed by well-documented demographic shifts in the population,” he concludes.

(c) 2016, Bloomberg · Luke Kawa