Where have all the missing American workers gone?

WASHINGTON — The unemployment rate has been on a slow downward trajectory since the recession ended nearly five years ago. While the overall jobless level has dropped to non-recession levels, the number of the working-age people with jobs is barely over 6 in 10, hovering at a level reminiscent of the late 1970s.

In May, the U.S. workforce-participation rate — the combination of those with jobs and unemployed workers actively seeking them — was just 62.8 percent, the same as the month before. Job markets have been essentially flat since October.

Where have all the missing workers gone?

A key factor, nearly all agree, is the growing exodus from the job market of Baby Boomers. Born roughly in the post-World War II period from 1946 to 1964, these workers are now at or fast approaching retirement age.

Another reason is that some employment-intensive industries that suffered the most during the Great Recession, especially in manufacturing and construction, have yet to fully rebound.

But perhaps the most significant factor is unemployed workers "who just drop out of the job market after one, two or three years of looking for work and not being successful," said Carl Van Horn, a professor of public policy at Rutgers University who studies workplace dynamics and employment trends.

Recent surveys suggest more and more long-time unemployed workers are abandoning the search for another job and leaving the nation's workforce.

"And they are disproportionately older workers," Van Horn said. "We have a large number of older (unemployed) workers who are not old enough to retire, yet they are facing discrimination in the workplace and have found it nearly impossible to get another job."

There's a flip side to that, though, Van Horn suggests: "As the economy gets stronger, as it continues to grow, eventually some of those discouraged workers will come back into the labor market, and we'll have a higher labor-participation rate."

But that hasn't happened — yet.

"We know that the reason unemployment is so high right now is pretty simple: employers haven't seen demand for their stuff pick up in a way that would require them to bring on more workers, put that factory back on line, get more people to work," said Heidi Shierholz, chief economist for the Economic Policy Center, a labor-oriented Washington think-tank.

"It's going to be this way for a while. We're in a long slog," Shierholz said, noting that the recession of 2007-2009 was the harshest downturn since the 1930s Great Depression.

"We really are in a recovery. Things are getting better," Shierholz added. "It is agonizingly slow. But we are going in the right direction."

It may be quite a while before the jobless rate falls back to 5 percent and below, long the informal standard pegged by economists as a typical employment level for non-recession times.

But 5 percent may no longer be the norm.

In February 2011, economists at the San Francisco Federal Reserve Bank suggested that around 6 percent might be a more appropriate unemployment rate as the "new normal." But some analysts suggested even that target may be unrealistically low.

"Our economy is leaving our unemployed folks further and further behind," said Robert A. Funk, CEO and Chairman of Express Employment Professional, an Oklahoma City-based service which tries to line people up with jobs and help client companies find suitable employees.

"But if people quit looking for work at a rate like this, it makes our job much, much more difficult," said Funk, a former chairman of the Federal Reserve Bank in Kansas City.

And while economists note high levels of unemployment among older working-age people, joblessness is disproportionately high among younger workers as well.

Generation Opportunity, a U.S. nonpartisan youth advocacy organization which keeps close track of job levels for younger adults, reported even higher effective unemployment rates for those under 30.

"School is out for summer, and more than four out of five recent grads don't have jobs. My generation deserves better than an economy in which a 15.4 percent effective unemployment rate for 18-29 year olds is considered a good month," said Patrice Lee, director of outreach for the organization.

Even though the overall unemployment rate has been essentially flat since last October and is holding at high levels with 3.4 million Americans counted among the ranks of long-term unemployed, it's been five months since federal emergency unemployment benefits expired, leaving the burden up to the individual states.

The unemployment rate is now back to where it was before the Great Recession. It was 6.3 percent in May, same as the month before.

Still, the share of Americans who are employed is stalled below 59 percent, well below the 63.3 percent peak in March 2007 and 64.7 percent of April 2000, said William Spriggs, chief economist for the AFL-CIO. "That difference represents the multi-million job gap needed," Spriggs said.

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Follow Tom Raum on Twitter: http://www.twitter.com/tomraum

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5 things to know about Apple's stock split

SAN FRANCISCO — Apple's resurgent stock may have as much to do with financial engineering as the company's technological wizardry.

Monday marked Apple's first stock split in nine years, a move designed to make it more affordable to buy shares of the iPhone and iPad maker.

The maneuver provided a boost even before it was completed. Since the split was announced in late April, Apple's stock has climbed 24 percent, creating more than $100 billion in shareholder wealth while the Standard & Poor's 500 edged up just 4 percent.

Other factors contributed to the Apple rally: The company raised its quarterly dividend, committed an additional $30 billion to buying back its stock, struck a $3 billion deal to buy headphone maker Beats Electronics and previewed its latest software for iPhones, iPads and Mac computers.

But the stock split helped renew investor interest in Apple Inc., already the world's most valuable company.

THE SPLIT COULD ATTRACT MORE INVESTORS.

The reason has more to do with psychology than logic. Splits lower a stock's trading price by substantially increasing the number of outstanding shares. Even though the company's market value remains the same, the prospect of a lower price per share often excites investors who previously shied away from a stock because it looked too expensive.

Companies executing splits hope to attract more buyers by making the stock appear more affordable.

Apple executed a 7-for-1 split. That means every Apple stockholder received six additional shares for every share they owned as of June 2. The distribution will increase Apple's outstanding stock from about 861 million shares to about 6 billion shares.

To adjust for that swing, Apple's stock price fell dramatically from Friday's closing price of $645.57. The shares were hovering around $93 in Monday's late morning trading, up by less than 1 percent.

...AND BRING APPLE MORE PRESTIGE

Although it's unclear if this was Apple's intent, the lower price could clear the way for the company to be included among the 30 stocks in the Dow Jones industrial average. The closely watched benchmark is supposed to mirror key sectors of the economy, a role that seems perfectly suited for Apple given the popularity of the company's products and its $171 billion in annual revenue.

But Apple's high stock price made it impractical to include the company in the Dow. That's because the Dow's value is calculated in a way that gives greater weight to the companies with the highest stock prices. The method has discouraged the Dow Jones selection committee from picking companies with stock prices trading at more than $300. Visa Inc. is the only Dow Jones company with a current stock price above $200.

Whether Apple will now make it into the Dow Jones is the "$3 trillion question," says Howard Silverblatt, senior index analyst for S&P Indices.

SPLITS ARE FALLING OUT OF FASHION

Stock splits once seemed reflexive whenever a company's share price neared $100. In recent years, though, splits have dwindled as companies became more comfortable allowing their stocks to trade for hundreds of dollars.

Even though the overall stock market has been soaring, only 57 splits have been completed since 2009 among companies in the Standard Poor's 500. That compares with 375 splits from 1997 through 2000, a period that coincided with the dot-com boom.

THIS ISN'T APPLE'S FIRST SPLIT

Apple has completed 2-for-1 splits on three previous occasions: May 1987, June 2000 and February 2005. The stock rose 2 percent in the first year after the 1987 split and surged by 60 percent in the first year after the 2005 split. The shares plunged 57 percent in the first year after the 2000 split, which occurred amid a steep downturn in technology stocks.

YOU'LL NEED TO ADJUST THE BAR

Before the split, the all-time high for Apple's stock stood at $705.07. With the split, that peak has now been revised to $100.72. Apple went public in December 1980 at a split-adjusted 39 cents per share.

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Rolls-Royce to sell luxury automobiles in Cambodia

PHNOM PENH, Cambodia — Fabled luxury car maker Rolls-Royce will soon be marketing its goods in one of the world's poorest countries: Cambodia.

Rolls-Royce Motor Cars announced Monday that it has joined with a Cambodian business partner to open a showroom in the Cambodian capital next month.

Rolls-Royce Asia-Pacific regional manager Paul Harris said his company signed a deal with HGB Group Co., Ltd. because it believed demand would grow along with Cambodia's economy.

Cambodia's average per capita annual income, according to the World Bank, is just over $1,000, a bit less than one-half of 1 percent of the cost of the cheapest Rolls-Royce.

However, a small but wealthy elite lives in the capital of the mostly rural nation, and it is not unusual to see various models of high-end Lexus automobiles passing by pedicabs in the city's dusty streets.

Harris said five Rolls-Royces have been sold in Cambodia since 2005.

"Nobody would believe that such a luxury car would come to Cambodia," said Minister for Industry and Handcrafts Cham Prasidh, who was present for the announcement.

Cheaper Japanese models still dominate the market, but the upgrading of roads — which had suffered from war and neglect — and the rise in people's living standards mean other car manufacturers from various countries are now entering the Cambodian market, he said.

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Merck to pay $3.85B for hepatitis C drug developer

WHITEHOUSE STATION, N.J. — Merck will spend nearly $4 billion for Idenix Pharmaceuticals with a per-share bid that more than triples the hepatitis C drug developer's last closing price.

Pharmaceutical companies are racing to test new and potentially lucrative treatments for hepatitis C, a blood-borne disease that causes liver damage and is expected to become more common as the U.S. population ages.

Merck will spend $24.50 in cash for each Idenix share. The company's stock closed at $7.23 on Friday and had already climbed 21 percent so far this year. Shares of Idenix Pharmaceuticals Inc. soared more than 230 percent at the opening bell Monday.

The boards of both companies have approved the deal, which they expect to close in the third quarter.

Merck said Cambridge, Massachusetts company has built a promising portfolio of hepatitis C treatments, including three that have reached clinical testing, or testing in humans. Its most advanced candidate, samatasvir, is in mid-stage testing.

Merck also has a portfolio of hepatitis C treatments that includes Victrelis and several drugs in development.

Doctors have long sought more effective, palatable treatments for hepatitis C. Until late last year, the standard treatments required patients to ingest 12 pills a day, alongside antiviral drug injections that can cause flu-like symptoms. That approach cured only about 75 percent of patients.

Physicians quickly embraced Gilead Sciences Inc.'s once-a-day pill Sovaldi, which was approved by U.S. regulators in December and cures between 80 percent and 90 percent of its patients. Sovaldi racked up more than $2 billion in sales for Gilead in its first full quarter on the market. But the drugmaker has taken criticism for the new pill's high price. One 12-week course of treatment costs $84,000.

Idenix shares climbed $16.67 to $24.10 at the opening bell. Shares of Merck, which is based in Whitehouse Station, New Jersey, slipped 42 cents to $57.43.

Shares of another hepatitis C drug developer, Achillion Pharmaceuticals Inc., now seen as a potential takeover target, climbed 40 percent to $4.05.

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McDonald's US sales slip again in May

OAK BROOK, Ill. — McDonald's says a key sales metric slipped again in the U.S. as it faced "ongoing broad-based challenges" in May.

The world's largest hamburger chain said U.S. sales declined 1 percent at locations open at least 14 months. The fast-food chain has been struggling to boost sales amid heightened competition and changing eating habits. Many of its core customers are also struggling financially, which has forced McDonald's to intensify its focus on value.

Executives at McDonald's have also conceded that the chain introduced too many items too quickly last year, which led to slower service and inaccurate orders. CEO Don Thompson has said the company is working with franchisees to address those problems, in part by ensuring restaurants have appropriate staffing.

The decline in the U.S. comes after a 1.7 percent drop for the first three months of the year. And last year, sales at established U.S. locations slipped 0.2 percent.

Overseas, a rebound in China after last year's worries about avian flu helped lift sales by 2.5 percent in its Asia, Middle East and Africa division. That in turn lifted global sales 0.9 percent for May.

In Europe, McDonald's largest market, the sales figure rose 0.4 percent, boosted by improvements in the United Kingdom and France. An expanded beverage business was among the factors behind the improvements.

McDonald's Corp., based in Oak Brook, Illinois, has more than 35,000 locations around the world. Its shares slipped 19 cents to $101.77 in premarket trading Monday. Its shares are up more than 5 percent so far this year.

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UK phone hacking trial set to go to jury

LONDON — The last lawyer has argued. The final witness has been heard.

After seven months of courtroom drama and celebrity cameos, Britain's phone hacking trial will soon be in the hands of jurors. They are expected to retire this week to decide whether the dramatic fall of powerful editors political insiders Andy Coulson and Rebekah Brooks will end in criminal conviction, and possibly prison.

The prosecution and the defense agree that employees of the scoop-hungry News of the World hacked the phones of scores of people, including Milly Dowler, a 13-year-old who was kidnapped in 2002 and later found murdered. Revelation of that action, in 2011, triggered a wave of public outrage that brought down the 168-year-old tabloid and spurred criminal investigations in which dozens of journalists and officials have been arrested.

Judge John Saunders told jurors that the News of the World had invaded victims' privacy — their job is to decide who knew about it.

Brooks, Coulson and five other defendants deny the charges, which include:

PHONE HACKING: Brooks, Coulson and former News of the World managing editor Stuart Kuttner are accused of "conspiracy to intercept communications" — phone hacking. Brooks was editor from 2000 until she moved to sister paper The Sun in 2003; Coulson was her deputy. He edited the News of the World between 2003 and 2007, when he became communications chief to Conservative leader, and later prime minister, David Cameron.

Several News of the World employees have pleaded guilty to hacking in conjunction with private investigator Glenn Mulcaire, who was briefly jailed in 2007 for eavesdropping on the voicemails of royal aides. Defense lawyers say there is no evidence to prove Brooks, Coulson and Kuttner — busy editors of a large paper in a fiercely competitive market — were aware of illegal actions by staff.

Prosecutors say they must have known; the News of the World paid almost 100,000 pounds a year ($168,000) to Mulcaire.

And they say Brooks and Coulson must have shared information with each other because they were having an affair. An intimate letter written by Brooks after the couple broke up provided the trial with one of its many riveting moments.

Lead prosecutor Andrew Edis told the jury that Brooks, Coulson and Kuttner all knew about phone hacking, and "none of them lifted a finger to stop it."

BRIBERY: Brooks, Coulson and ex-News of the World editor Clive Goodman are accused of paying public officials for information.

Prosecutors allege Coulson and Goodman bought royal phone directories and that the phone numbers were targeted for hacking.

Goodman was jailed along with Mulcaire in 2007 for hacking the phones of royal staff. But he did not disclose until this trial — after being promised that he would not face further phone hacking charges — that he also eavesdropped on Prince William and Kate Middleton, the latter more than 150 times.

Brooks is charged with conspiring to pay officials for information while she was editor of The Sun. Another charge, that Brooks paid an official for photos of Prince William in a bikini, was dropped due to lack of evidence.

COVER-UP: Brooks, her husband Charles, her personal assistant Cheryl Carter and News International security chief Mark Hanna are accused of conspiring to pervert the course of justice by hiding evidence from investigators. Prosecutors say that as the police net closed around the News of the World in 2011, Carter took boxes of notebooks from the company archive at Brooks' request.

They also allege that Rebekah Brooks, Charles Brooks and Hanna took electronic devices and other material from the Brooks' home and hid the belongings in a parking garage, where they were later found by a cleaner. The stash included a laptop computer, documents and several lesbian porn DVDs. Charles Brooks said he hid the material because he was embarrassed, not disposing of evidence.

THE DEFENSE

Defense attorneys accuse prosecutors of twisting innocent actions to fit a narrative of wrongdoing. Coulson's lawyer, Timothy Langdale, said prosecutor Edis was "more than capable of making running for a bus look sinister."

Laidlaw said prosecutors had subjected Rebekah Brooks to "a witch hunt," and the judge told jurors to ignore the vitriol directed at her online. Brooks gave her own account of events on the witness stand, describing her rise from cub reporter to top executive, the pressures of her career and her "car-crash" personal life.

Her husband was painted by his defense as an amiable but sometimes "daft" person incapable of masterminding a criminal operation. A character witness described how he once drank a pint of dishwashing liquid as a hangover cure. Charles Brooks' lawyer Neil Saunders said that "while he is a man who is capable of drinking a bottle of Fairy Liquid, he is not capable of committing this offense."

THE MOMENT OF TRUTH

The trial has featured moments of high drama — including the revelation of Coulson and Brooks' love affair— and celebrity appearances. Jude Law and Sienna Miller testified about how their relationship, and Miller's fling with Daniel Craig, became headline news.

The final chapter is in the hands of eight women and three men on the jury, who will deliver their verdicts as soon as they have reached a decision on all counts.

If convicted, the defendants could face prison. The maximum sentence for phone hacking is two years in jail, while the other charges carry a maximum life sentence, although the average term imposed is much shorter.

Summing up, the judge told jurors that all the defendants — apart from convicted phone hacker Goodman — "are of good character."

"It does not mean that any of the defendants cannot lie," he said.

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Follow Jill Lawless at http://Twitter.com/JillLawless

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High court rules on scope of bankruptcy authority

WASHINGTON — The Supreme Court says bankruptcy courts have limited authority to rule on disputes outside the traditional bankruptcy process.

The justices ruled unanimously Monday that a Washington state bankruptcy court did not exceed its powers when it considered a lawsuit claiming the Bellingham Insurance Agency had wrongfully transferred assets to the another insurance company shortly before declaring bankruptcy.

Lower courts had upheld the bankruptcy court action. The 9th U.S. Circuit Court of Appeals found the bankruptcy judge was simply making recommendations that were later approved by a federal judge and that all parties had consented to the proceeding.

The high court agreed that a bankruptcy court can rule on non-bankruptcy matters as long as a federal district court reviews those findings.

The case is Executive Benefits Insurance Agency v. Arkison, 12-1200.

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Tyson wins bidding war to gobble up Hillshire

NEW YORK — Tyson Foods Inc. has won a bidding war to gobble up Hillshire Brands, the maker of Jimmy Dean sausages and Ball Park hot dogs.

Tyson had been vying with rival poultry producer Pilgrim's Pride for Hillshire, which wrapped up its bidding process Sunday. Tyson ended up raising its offer to $63 per share. It had previously offered $50 per share, after which Pilgrim's Pride raised its bid to $55 per share.

Pilgrim's Pride, which is owned by Brazilian meat giant JBS, said Monday that it is withdrawing its offer.

Still, the deal is not sealed yet. It is contingent on the termination of Hillshire's offer to acquire Pinnacle Foods Inc., which makes Birds Eye frozen vegetables and Wish-Bone salad dressings. Pinnacle could choose to cut bait and walk away with $163 million breakup fee, or force the deal to a vote by Hillshire shareholders.

A Pinnacle representative didn't immediately return a call for comment.

In a conference call with reporters, Tyson CEO Donnie Smith said he was confident the $63 offer would end up being worthwhile for Tyson shareholders, despite how high the price went.

"Great brands like Jimmy Dean and Ball Park just don't become available very often," Smith said.

Hillshire's stock closed at $36.95 on May 9, the day before the company announced the Pinnacle deal.

Tyson, like Pilgrim's Pride, has been looking to boost its presence in brand-name, prepared foods like Jimmy Dean breakfast sandwiches. Those types of products are more profitable than fresh meat, such as chicken breasts, where there isn't as much wiggle room to pad prices.

While Tyson and Pilgrim's Pride already sell some brand-name products, their businesses have been more focused on supplying supermarkets and restaurant chains.

In particular, Tyson said it was drawn by Hillshire's stable of breakfast foods, which would better position it in the fast-growing category.

Tyson also noted the potential for cost savings by combining supply chains, transportation and other operations with Hillshire. But Smith said it was too early to comment on how many jobs could be cut as a result of the deal.

Tyson's offer will be in place until Dec. 12, the final termination date of the deal with Pinnacle.

Hillshire Brands noted it does not have the right to end the deal with Pinnacle on the basis of the Tyson offer, or enter into an agreement with Tyson before the deal is terminated.

"There can be no assurance that any transaction will result from the Tyson Foods offer," Hillshire said in a statement.

Hillshire, based in Chicago, had been trying to diversify its own portfolio by moving into other areas of the supermarket with the $4.23 billion acquisition of Pinnacle. But some investors questioned the wisdom of that deal, given the outdated image of many Pinnacle brands and the differences in the two companies' product portfolios.

The offer from Tyson is worth $7.75 billion based on Hillshire's 123 million shares outstanding. Tyson values the deal at $8.55 billion, including debt.

Tyson shares fell 2 percent in premarket trading. Hillshire shares rose 4.7 percent an hour ahead of the market opening.

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Follow Candice Choi at www.twitter.com/candicechoi

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Stock market rises slightly in midday trading

NEW YORK — The stock market nudged higher Monday after a handful of U.S. companies announced deals. Family Dollar's stock jumped following news that investor Carl Icahn has taken a stake in the company.

KEEPING SCORE: A half hour before noon, the Standard & Poor's 500 index was up four points, or 0.2 percent, to 1,954.

The Dow Jones industrial average rose 34 points, or 0.2 percent, to 16,958, while the Nasdaq composite index rose 17 points, or 0.4 percent, to 4,338.

On Friday, the S&P 500 index notched another record high, its eighth in 10 trading days.

HOW FAR: The market has been on a steady climb for three weeks running, pulling the S&P 500 up 4 percent in a month. Judging by some measures, that sudden success makes it look like the S&P 500 has moved "too far, too fast," said Joe Bell, senior equity analyst at Schaeffer's Investment Research. But there are still plenty of investors laying bets against the market. "We don't think there's an overwhelming amount of optimism right now," he said.

TYSON WINS: Tyson Foods emerged as the winner in a bidding war for Hillshire Brands, beating an offer by Pilgrim's Pride for the meat-processing company. Tyson raised its offer to $63 a share, beating Pilgrim's Pride's offer of $55 a share. Hillshire Brands jumped $2.95, or 5 percent, to $61.87, while Tyson Foods slipped $1.69, or 4.2 percent, to $38.32.

MERGER MONDAY: Merck announced a deal to buy Idenix Pharmaceuticals for $3.85 billion, an acquisition that would give the pharmaceutical giant Idenix's array of treatments for hepatitis C. Idenix soared $16.97, or 234 percent, to $24.20.

ICAHN: In a regulatory filing on Friday, Carl Icahn said he and his affiliates have picked up a 9 percent stake in Family Dollar, a discount store, and plan to look for changes to boost the company's value. Family Dollar's stock jumped $7, or 12 percent, to $67.52.

APPLE SPLITS: Apple's stock rose 73 cents, or 0.8 percent, to $92.95. That's after closing at of $645.57 on Friday. What happened? The difference reflects Apple's 7-for-1 stock split. Every Apple stockholder received six additional shares for every share they owned. On its own, the split didn't change Apple's market value.

BONDS AND COMMODITIES: In the market for U.S. government bonds, the yield on the 10-year Treasury edged up to 2.62 percent from 2.59 percent late Friday. Yields rise when bond prices fall. The price of oil rose $1.54 to $104.19 a barrel.

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US stocks drift sideways in midday trading

NEW YORK — The U.S. stock market crept higher in midday trading after companies announced a handful of deals. Major indexes appeared headed to new highs.

Shortly before noon on Monday, the Standard & Poor's 500 index was up six points, or 0.3 percent, to 1,955. The S&P ended last week at a record.

The Dow Jones industrial average was up 43 points, or 0.3 percent, to 16,967. The Nasdaq was up 23 points, or 0.5 percent, to 4,345.

Hillshire Brands jumped 5 percent after Tyson Foods raised its bid for the maker of Jimmy Dean sausages. Family Dollar's stock jumped 14 percent following news that investor Carl Icahn has taken a stake in the company.

The drug company Merck announced a deal to buy Idenix Pharmaceuticals, shooting Idenix's stock up 234 percent.

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