The point of the Barclays study is that there is not much of an accelerated decline the LFPR, which is also supported by the Chart 2. graph you posted. The graph shows some acceleration in the 16 to 24 group, but that's not uncommon during a recession or down economy. Younger workers are often the first to be let go, and other may choose to stay in school longer when job opportunities are slim.No one is ignoring the demographic trend. It's the accelerated decline in the LFPR due to the weak economy that analysts refer to when talking about U3.
Right, the argument is not that the effect doesn't exist at all, but rather that it has historically been exaggerated by economists and thus it probably still is being exaggerated by reports like the one from Bofa.The increase in the LFPR which caused U3 to remain unchanged in February is the case in point.