Labor force participation of people aged 24-55

Prime aged worker participation has fallen 3 percentage points since the start of the recession and there are no signs that it's picking up.

The Fed likes to blame demographic shifts for the decline in participation but this chart argues that discouraged workers remain plentiful. If you were to add them back to the workforce, US unemployment would jump from 5% to 8% -- a number that would help to explain the lack of wage growth that's puzzling the Fed.