Drudge points it out:
Record 1.2M Fall Out Of Labor Force...
Participation rate falls to 63.7%...
30-year low...
Zero Hedge has the truth:
Record 1.2 Million People Fall Out Of Labor Force In One Month, Labor Force Participation Rate Tumbles To Fresh 30 Year LowSubmitted by Tyler Durden on 02/03/2012 08:51 -0500
A month ago, we joked when we said that for Obama to get the unemployment rate to negative by election time, all he has to do is to crush the labor force participation rate to about 55%. Looks like the good folks at the BLS heard us: it appears that the people not in the labor force exploded by an unprecedented record 1.2 million. No, that's not a typo: 1.2 million people dropped out of the labor force in one month! So as the labor force increased from 153.9 million to 154.4 million, the non institutional population increased by 242.3 million meaning, those not in the labor force surged from 86.7 million to 87.9 million. Which means that the civilian labor force tumbled to a fresh 30 year low of 63.7% as the BLS is seriously planning on eliminating nearly half of the available labor pool from the unemployment calculation. As for the quality of jobs, as withholding taxes roll over Year over year, it can only mean that the US is replacing high paying FIRE jobs with low paying construction and manufacturing. So much for the improvement.Chart below shows it all - that jump is not a fat finger!
And Labor Force Participation:
This is the largest absolute jump in 'Persons Not In Labor Force' on record...and biggest percentage jump in 30 years.
The American chimes in as well:
Why the official 8.3 percent unemployment rate is a phony number — and what it means for Obama’s reelection
By James PethokoukisFebruary 3, 2012, 11:47 amThe January jobs report is out and it seems pretty strong, at least superficially. The unemployment rate fell to 8.3 percent from 8.5 percent, the lowest rate since February 2009. And the economy added 243,000 jobs, the most since April 2011.
But does anyone believe an “official” unemployment rate of 8.3 percent really gives an accurate picture of the U.S. labor market? Even though the unemployment rate fell, so did the labor force participation rate (as more Americans became discouraged and gave up looking for work). Here’s what that means:
1. If size of the U.S. labor force as a share of the total population was the same as it was when Barack Obama took office — 65.7 percent then vs. 63.7 percent today – the U-3 unemployment rate would be 11.0 percent.
2. But let’s not go all the way back to January 2009. In January 2011, the unemployment rate was 9.1 percent with a participation rate of 64.2 percent. If that were the participation rate today, the unemployment rate would be 8.9 percent, instead of 8.3 percent. As an analysis from Hamilton Place Strategies concludes, “Most of the shift of the past year is due not to the improvement in the labor market, but the continued drop in participation in the labor force.”
3. Now to be fair, some of the decline in the participation rate is aging Baby Boomers dropping out of the labor force. But taking that into account still doesn’t get us very far, as HPS notes:
Demographic projections expect that participation rate to be at 65.3 percent. If that full participation rate is the goal, our economy is “missing” 3.8 million workers, up from the 3.4 million we noted in the white paper. The unemployment rate in that context has not budged at 10.4 percent.
4. Then there’s the broader, U-6 measure of unemployment which includes the discouraged plus part-timers who wish they had full time work. That unemployment rate is still a sky-high 15.1 percent.
5. If the participation rate does level off at its current rate, according to HPS, the economy would need to generate 231,000 jobs per month to get below 8 percent unemployment by Election Day. If the participation rate continues its downward slide, however, that number would be much lower — perhaps as low as 131,000 jobs a month (see below chart). But such a decline wouldn’t necessarily be good news.
Why is that? Because the unemployment rate would be falling because the economy remained weak with not many jobs created. That also means weak income growth, which is even more influential on presidential election results than the unemployment rate. If people don’t sense their own economic situation improving very much, it won’t matter what some distorted statistic from a government agency says about the economy. Or what Obama says, either.
One of the most accurate election forecasting models doesn’t even look at the unemployment rate. It looks at per person GDP growth, which correlates with income growth. If you plug a 2 percent GDP forecast for 2012 into the model of Yale’s Ray Fair, the algorithm predicts a close election, but still an Obama defeat with the incumbent president getting just 47.8 percent of the two-party vote.
Bottom line: The unemployment rate is dropping because economic growth continues to be so anemic that nearly 4 million Americans have quit looking for work and have been disappeared by the Labor Department. This still isn’t much of a recovery.
I've been saying it for a long time.
Obama and his minions will use the tragedy of people losing their benefits, giving up looking fr work, losing their homes and falling off the books to taut economic recovery and make themselves look better for the election year.
Think about that. 1.2m people gave up looking for work in January.
257,000 new jobs.
1,200,000 lost vs. 257,000 gained = good news?
Even Reuters can't avoid the truth no matter how furiously they spin.
Job growth surges, jobless rate near 3-year low
(Reuters) - The economy created jobs at the fastest pace in nine months in January and the unemployment rate unexpectedly dropped to a near three-year low, giving a boost to President Barack Obama as campaigning heats up ahead of November elections.Nonfarm payrolls jumped 243,000, the Labor Department said on Friday, as factory jobs grew by the most in a year. The jobless rate fell to 8.3 percent - the lowest since February 2009 - from 8.5 percent in December.
The gain in employment was the largest since April and it far outstripped the 150,000 predicted in a Reuters poll of economists. It could lessen the likelihood of further action from the Federal Reserve to spur a stronger recovery.
"If six months ago, (I) told you the unemployment rate was going to be 8.3 percent when all those vampire economists...were telling us the economy was about to die again...you'd have told me I was a crackpot," Stuart Hoffman, chief economist at PNC Financial Services in Pittsburgh, told Reuters Insider.
The payroll gains were widespread - from retail to temporary help, and from construction to manufacturing.
A survey of households showed the unemployment rate declined even as new job seekers flooded into the labor force. Economists had expected the jobless rate, which has now fallen 0.8 percentgage point since August, to hold steady.
"The report was much better than expected in terms of indicating fundamental strength in the economy," said Pierre Ellis, senior economist at Decision Economics in New York.
U.S. stocks opened higher on the report, while U.S. Treasury debt prices fell sharply. The dollar rose against the yen.
The report contrasted with a fairly glum assessment of the economy offered by the Fed last week.
Officials at the U.S. central bank have been debating whether to buy more bonds - a program dubbed QE3 - to drive interest rates lower. After a policy meeting last week, they said they would likely hold overnight interest rates near zero at least through late 2014.
"This is the kind of data that will challenge the Fed's wisdom of putting a late 2014 date on prospective tightening," said Alan Ruskin, head of G10 currency strategy at Deutsche Bank in New York. "The data plays strongly against QE3, although the Fed will surely keep it in the wings."
REVISIONS ALSO SHOW STRENGTH
The tenor of the report was strengthened by revisions to November and December data, which showed 60,000 more jobs were created during those months than previously reported.
In addition, average hourly earnings rose four cents, which should help to support spending. The report suggested that expectations of a slowdown in U.S. economic growth in the first quarter were not yet impacting on companies' hiring decisions.
Employment in the private sector surged 257,000 - the largest gain since April. Government payrolls fell 14,000, the least since September.
U.S. economic growth quickened to a 2.8 percent annual rate in the final three months of 2011, but it was widely expected to slow as businesses ease back on efforts to rebuild inventories and exports slip amid a likely recession in Europe.
Some economists cautioned that January's jobs figures could overstate the pulse of the recovery.
"Consumer confidence, income and spending remain lackluster," said Kathy Bostjancic, director of macroeconomic analysis at the Conference Board in New York. "For this to mark an upturn in the labor market, then businesses will have to continue to hire on this scale throughout the winter."
While employment growth has quickened there are no jobs for three out of every four unemployed people and 19.3 million Americans are either out of work or underemployed.
Still, there are signs the economy continues to enjoy decent momentum.
A separate report on Friday showed service sector activity quickened last month to a near one-year high, auto sales have been buoyant, factory activity strong and new claims for jobless benefits have been trending lower.
CAUTIOUS OPTIMISM
The unemployment rate has now declined for five straight months, partly because of unemployed workers giving up the hunt for a job but also because people are finding work.
A broad measure of unemployment, which includes people who want to work but have stopped looking and those working only part time but who want more work, slipped to 15.1 percent in January from 15.2 percent in December.
Annual revisions to the payrolls figure showed job growth had been stronger than previously believed in the year through last March, and the March payroll level was revised up by 165,000.
Mild winter weather boosted employment last month in construction, which added 21,000 jobs after a 31,000 increase in December. Manufacturing payrolls surged 50,000, the largest gain in a year, after rising 32,000 the prior month.
Overall, the goods-producing sector added 81,000 jobs last month, the most since January 2006.
Transportation and warehousing employment increased 13,100 and courier jobs only fell 1,500. Last month, the Labor Department reported a large increase in courier jobs in December, but revisions showed they actually declined.
Retail employment rose 10,500 after gaining 6,200 in December. Temporary help services jumped 20,100 after rising 8,300, a potentially good sign for future permanent hiring
The bobbleheads on Fox ask if this is sustainable?
Well sure, just keep doing nothing. More will fall off the rolls, lose their homes and your numbers will continue to improve.
8 comments:
In the last 4 months, the US unemployment rate has fallen from 9.1% to 8.3%, while the Canadian rate has risen from 7.1% to 7.6%. It's actually pretty astonishing that the gap between the two closely intertwined economies has narrowed from 2.0% to 0.7% in such a short time. This isn't bullshit propaganda, it really is good news for the US economy, relatively speaking.
And it's not just Canada that the US has been outperforming: the unemployment rate in the Eurozone is up to 10.6%. I realize that the US rate has been dropping because the overall participation rate is also dropping, but this has been happening in Canada and Europe as well. Canada's participation rate is slightly higher than America's, but I'm pretty sure that the Eurozone's rate is lower than both, especially that of southern Europe (I can't find reliable stats on it).
In Canada, the participation rate (which IMO is a more accurate indicator of a healthy economy than the unemployment rate) ranges from 74.1% in Alberta, with the other prarie provinces close behind, to 61.3% in Newfoundland, just below the other Atlantic provinces. These are January 2012 numbers.
In the US, I could only find participation rate numbers by state from 2007. Here are the top ten states:
N. Dakota 73.5%
S. Dakota 73.1%
Minnesota 72.9%
Nebraska 72.9%
Colorado 72.8%
Utah 72.3%
Iowa 71.8%
Wyoming 71.3%
New Hampshire 71.0%
Wisconsin 70.9%
Not surprisingly, the largely Germanic Upper Midwest states did best, and like in Canada the middle of the continent outperformed the coasts. Here are the 5 lowest states by participation rate:
W. Virginia 55.9%
Mississippi 60.5%
Alabama 61.4%
Louisiana 61.6%
Kentucky 62.5%
West Virginia was WAY lower than any other state. Interestingly, along with Kentucky, Newfoundland and the other Atlantic provinces, these regions are some of the whitest areas and last bastions of old-stock WASPs in North America, where the demographics haven't changed much in 100, or even 200 years. Maybe these simple white trash folk would rather collect the dole, or brew moonshine, or cook meth than work (apologies in advance to any Newfies or hillbillies reading this). :)
Hi Jeppo. Here's some information you may find interesting. I don't know if Canada plays "seasonally adjusted" games with Labor statistics or not so all of these are NON-seasonally adjusted numbers.
workforce participation taken from here
June 2008
155,612,000
January 2012
15,3485,000
Unemployment rate taken from here
January 2002
9,051,000 6.3 %
January 2010 -- highest month during Obama's tenure and the highest in the last 10 years
16,147,000 10.6 %
July 2011 through January 2012
J 14,428,000 9.3%
A 14,008,000 9.1 %
S 13,520,000 8.8 %
O 13,102,000 8.5 %
N 12,613,000 8.2 %
D 12,692,000 8.3 %
J 13,541,000 8.8 %
Well, isn't that curious. If you use the unadjusted numbers, January's unemployment actually went up not only over Decembers non-adjusted number but is even higher than their December posted "adjusted" rate of 8.5 % and is in fact back at September's levels .
Also to note is that January 2012 marks the end of the 99 weeks since the highest level of unemployment in January 2010. In other words more Americans fell off the unemployment rolls, and are therefore NOT counted in any of these statistics, than at any previous time. They fall off and both adjusted and non-adjusted numbers look better.
Right on schedule with what I've been saying all along. The worst of the unemployment began in the summer of 2009. As their 99 weeks began to expire the "official" numbers began to gradually improve.
Now, don't get me wrong. I am very happy people are getting back to work but it is no where near as rosy as they would have us believe and certainly no reason for Presidential Victory laps and MSM champagne popping.
Or, to put it another way (and this is not directed at you)
Don't piss down my back and tell me the rain is ending the drought.
You can find tons of info and tables here. Just have to figure out what you are looking at and what you are looking for.
Ok, those first 2 reference links don't work (I was afraid they might not) but the last one taking you to the list of historical data does.
The 1.2 million number doesn't really mean anything, it was just a population adjustment. http://www.ritholtz.com/blog/2012/02/no-rick-santelli-and-zero-hedge-one-million-people-did-not-drop-out-of-the-labor-force-last-month/
I've seen that since as well and while I agree that does not mean 1.2m quit looking last month a population adjustment means that 1.2m MORE are not looking for work/fell off the rolls than previously thought.
I get queasy when I hear any gov't offical, regardless of party affiliation, start using words like adjusted and adjustment.
:)
By the way, using the archive data link above, according to the BLS in Jan 2002 4,938,000 were not attached to the labor force. In January 2001 (the High Water mark mentioned above) it was 6,108,000. In Dec 2011 6,135,000 and a month later, Jan 2012, it was 6,495,000. Higher than the high water mark but by no means the highest ever.
For what their stats are worth. I do not know how they calculate that information.
The worst of the unemployment began in the summer of 2009. As their 99 weeks began to expire the "official" numbers began to gradually improve.
That's a very good point and goes a long way toward explaining why the unemployment rate has steadily fallen since last summer. The 99ers are dropping out of the labour force and as the overall participation rate drops, so does the unemployment rate.
The unemployment stats in Canada are "seasonally adjusted" as well, not quite sure exactly what that means. In Canada there are different standards depending on the province/region for how many weeks you have to work in order to qualify for unemployment benefits and how long the benefits will be paid out; e.g. in Newfoundland you need fewer weeks of work to qualify and will be able to collect payments for longer than in Alberta. But the maximum number of weeks anyone can collect EI payments, as they're called, is 52, not 99.
Sorry, MR, if I made it seem like everything is sunshine and lollipops for job-seekers in the US right now, that wasn't my intention. I know that things are still very tough out there for millions of Americans, including yourself. But the fact is that the US economy is actually creating jobs now, while the Canadian and European economies (except for Germany) aren't. The contrast between the US and the rest of the West is what I wanted to emphasize.
No doubt the pro-Obama MSM will trumpet these relatively positive numbers, especially in an election year. But with the fedgov spending 25% of the GDP while only collecting 15% of the GDP in tax revenues, it's all an illusion, a temporary blip. Only when the deficit is reduced to a tiny fraction of what it is today will we be able to tell if this "recovery" (compared to the rest of the West) is real or not.
No, Jeppo, I didn't take it that way. Although you seem a little more optimistic than I. But that's not hard these days :)
My points are more directed at those who believe the MSNBC's of the world and Obama that everything is comingup daffodils and believe everything really is sunshine and suckers. Even Fox is guilty of it. Especially that goober She Smith.
I gave you those stats because you seem to be lookng for that kind of info (especially participation rate) and that's where I find most info when I go on a rant.
Cheers good sir!
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