Your Friday Morning Dose of Doom & Gloom
The good news: “Nonfarm payrolls jumped 243,000” last month.
The bad news: The unemployment rate is nowhere near the BLS’s damned lie of 8.3%. It’s somewhere more like 11.5%. I haven’t even started digging around for the U-6, but it can’t be much lower than 15%, and perhaps still higher.
As usual, Tyler Durden is happy to scare the bejeebus out of everybody, which he did to me this morning with the following chart.
What’s it mean? I’ll let Tyler explain:
Sick of the BLS propaganda? Then do the following calculation with us: using BLS data, the US civilian non-institutional population was 242,269 in January, an increase of 1.7 million month over month: apply the long-term average labor force participation rate of 65.8% to this number (because as chart 2 below shows, people are not retiring as the popular propaganda goes: in fact labor participation in those aged 55 and over has been soaring as more and more old people have to work overtime, forget retiring), and you get 159.4 million: that is what the real labor force should be. The BLS reported one? 154.4 million: a tiny 5 million difference.
Shorter version: The old are staying in the workforce because they must, and the young are dropping out of the workforce because they have no hope of finding work.
So forget the big, red “8.3″ glowing above the mast at Drudge. This country is still very deep in a very long employment crisis.
UPDATE: Hold on to your breakfast, but 1,200,000 Americans dropped out of the labor force last month — a record.
– 7.2% or less in time for Obama’s re-election.
i’m confused. either the math, the grammar or both seems wrong. according to your quote of tyler, “…the US civilian non-institutional population was 242,269 in january, an increase of 1.7 million…” then, following the update link, tyler is saying,”…the non-institutional population increased by 242.3 million meaning…”
i’m as anxious as anyone to get all worked up, but 242,269 is not an increase of 1.7 million and i doubt an increase of 242.3 million in a country, the population of which, is about 315 million.
or do i have a flair up in my alzheimer’s?
Nope, it’s not your Alzheimer’s. I’m afraid Stephen is doing something very dangerous: blogging sober.
FTW
incidentally, i did decide that if you add three zeros to the first number and change “increased by 242.3 million” to “increased to 242.3″ then it isn’t yet medication time.
but it is getting close.
I’m surprised the reported numbers aren’t better considering how good they’re getting at not counting the inconvenient people.
I’m curious, why do we still break out farm vs non-farm payroll?
My other question, with age and demographics trending old to very old, at some point should we expect a big die-off that flips the pyramid?
1. Farm employment has been steadily declining due to technological change for 80+ years (accompanied by increasingly capital-intensive farm operations). It looks like that dynamic will continue until the average grain farm size is at least 10K acres (animal husbandry is already extremely capital-intensive, except for boutique producers). So, farm numbers don’t tell us anything about the ups and downs of the economy.
2. We’ve got roughly 20 years before the Boomer die-off starts, maybe sooner if Obamacare is fully implemented.
I think it’s because farm payrolls are determined by the season and crop yields and are generally unaffected by the state of the economy.
your demographics question is fascinating. this is a Ph.D thesis just waiting to happen. the short answer seems to me that the die off will be spread over 20-30 years with medical advances playing a large part. any flipping of the pyramid will depend on fertility rates and immigration. the more i ponder this, the more interesting it gets.
thanks.
It appears that of that 847K new jobs headline figure, only 10% are full-time jobs.
The Reps could be cynical and extend unemployment benefits from 99 weeks to 104 weeks. How could the Dems disagree ?
This will allow us to see exactly who is retired and who is discouraged.
The discouraged (and probably many of the retired) will temporarily return for 5 weeks of unemployment checks raising the unemployment number up to more realistic values.
” 1,200,000 Americans dropped out of the labor force last month ”
They wuz pushed!
Much as I like having more excuses to rag on Obama, the labour force numbers are not real. They’re a result of the switch from the 2000 census data to the 2010 census data – nobody actually observed a million plus people leaving the economy.
I think what Alsadius said is true.
Also, keep in mind that participation rate and unemployment rate are political numbers, not economic numbers. What really matters from an economic perspective is whether jobs are increasing or not.
If today’s numbers are accurate, this is cause for celebration (they are certainly fuzzy numbers though, with seasonality fudge factors thrown in on top of the census stuff).
The bottom line is, if jobs are growing, the economy is probably growing, and that is a good thing.
If folks are dropping out of the work force, because of retirement, moving back to Mexico, going Galt, or whatever, that is a different factor altogether, and it will drive the unemployment number up. Also, an increase in population will drive those numbers in a negative direction.
Those are important social/political issues, but don’t let them blind your investment decisions.
Yeah, the 1.2 million number is just due to a population adjustment, as The American Spectator explains here: http://spectator.org/blog/2012/02/03/participation-rate-issue-less
The huge number shift is due to an annual adjustment.
See Maxed-Out Mama’s post
http://maxedoutmama.blogspot.com/2012/02/january-employment-2012.html
in which she notes “… every January the population basis is adjusted for the Household Survey … This introduces discontinuities … In the next two months it will all smooth out and the running totals will become comparable again.”
So — no panic on this one. Not yet, anyway.