The Economy Keeps On . . . Drifting Aimlessly
Well, new job figures are out. And to anyone who actually knows their behind from a small intentionally shovel-excavated spot on the earth’s surface, the new figures for June 2015 are not exactly good news.
Yes, “official” unemployment is now at 5.3%. But alone, that statistic tells you squat. Since “official” unemployment doesn’t count discouraged workers who’ve said “screw it” and quit looking for work, it is actually possible for the economy to lose jobs while unemployment goes down at the same time.
That’s pretty much what happened last month. Unemployment went down because so many people said the hell with it and quit looking for a job – not because the economy created a plethora of new jobs (job creation was lower than during the previous month). Oh, and wages are effectively stagnant right now, too.
The most meaningful number for gauging the state of the economy is the labor participation rate. And there, the news isn’t so good.
The US labor participation rate is the fraction of the civilian labor force (more precisely, the civilian non-institutional population) that is either actually working or actively looking for work. Today, the US civilian labor force is 250,663,000. But of that group, only a total of 157,037,000 are actively participating today – 148,739,000 are working, while another 8,299,000 are actively looking for work.
That’s a labor participation rate of 62.6%. The US labor participation rate hasn’t been that low since the first year of the Carter Administration – in October 1977, to be precise. That month it was 62.4%; it hasn’t been below 62.7% since. Until last month, that is.
Let’s put that in perspective. In January 2009, the US labor participation rate was 65.7%. If that were the case today, the US labor force would have 164,686,000 people either working or actively looking for work. With 5.3% unemployment, a 65.7% participation rate would mean we’d need 156,397,000 people working – or about 7.65 million more jobs than exist today. With the number that are working working today – 148,739,000 – if we had a labor participation rate of 65.7% we’d have a 9.7% unemployment rate.
Even if unemployment today were the same as it was in January 2009 (7.8%), with a 65.7% labor participation rate we’d need about 152,770,000 people working. We’re well over 4 million jobs short of that, too.
“Recovery”? Yeah, right. In the best measure of economic wellness – labor participation rate – the US economy is at freaking Carter Administration levels.
And we’ve been at those levels for a while, too. The labor participation rate has been stuck at Carter Administration levels since January 2012 – or for the last 3 1/2 years.
“Recovery”? What damn recovery? The economy is still stuck in neutral, and has been for 3 1/2 years. Before that, it was in free-fall for about 3 years.
Call me when the labor participation rate has been rising consistently for a few months. Then we can talk seriously about an economic “recovery” having begun.
Category: "The Floggings Will Continue Until Morale Improves", Economy
I’m guessing that, with this continual downward trend in unemployment, the spending on social programs for the unemployed and indigent will also soon be experiencing a similar downward trend.
Not a chance.
If you believe ANY statistics or polls put out by this administration..I have some swampland to sell you in the desert!!
“Actively looking for work”. I am old enough to remember when people did that.
Ditto.
My baby sister just got hired on as a life guard back home. She got the job hands down because she was THE ONLY APPLICANT to fill out the application form in its entirety. So yes, actively looking has become a relative term…
We still have lifeguard positions to fill here, as well and it’s July 4th!! Five years ago, those jobs would have been filled in March!
I remember getting out and when I got home I applied for unemployment. The lady was very nice and walked me through the forms, how I had to contact 3 employers a week or something, etc.
The next day I called her up and told her to cancel the unemployment because I had found a job.
“you found a job” she said after a minute of silence.
“Yeah, I found a job”
“uhhh…no-one has ever found a job that fast”
“Well, they must not have been trying very hard”
True story and I remember it 30yrs later.
That’s why I hate using percentages instead of the real numbers. Take for example Mission Capable Rates for the Air Force. They take the number of partial and fully mission capable birds and divide it by the PAA (primary aircraft authorization). But, say a wing commander has 25 aircraft – one is not MC and 24 are MC. His MC rate is 96%. But, he can’t fix the one bird because it requires it to go to the depot. So, he signs off on some paperwork to transfer the plane to the depot and off his books. Now his MC rate is 100%. (24/24). Another one just broke? Repeat the procedure and the MC rate stays at 100% (23/23).
This happened big time with the C-141 fleet before Desert Storm when they found out the biggest owner of C-141s was the Depot. Percentages hide a multitude of sins. Nine out of ten planes gives you the same percentage as 90 out of 100.
What the Kool-aid drinkers can’t or won’t acknowledge is that 150k jobs a month SOUNDS good, but for two little things:
First, population growth means we need to be adding closer to 250k jobs a month just to be keeping up with said growth. Second, look at the number of people per month who just say “fuck it” and either go on SS early, or worse, on SS Disability.
Do those numbers include self-employed people? If not, they should.
People who are self-employed aren’t reported by ADP, the payroll company, because they aren’t on someone else’s paycheck.
They still pay taxes and contribute cash to the economy but I don’t think they count in those figures.
The 3 kinds of lies…….. lies, damn lies and statistics.
I was the production control clerk for a contractor motor pool for a few years after I retired. That meant I got to do the daily, weekly, monthly, quarterly, and annual reports. Want to make the MOPO look good….put the impressive numbers at the front of the report and bury the not so good. Want it to look bad, reverse procedure. Much like the voting public. the majority of the people who should have been paying attention to the reports seldom read them, let alone understood what they were seeing.
One thing I’ve also noted about the monthly unemployment figures under this administration, is that when they are good they are usually rolled out with much fanfare. Not usually mentioned is that the stats are compiled using incomplete data. Revised (true) figures will be quietly released in a couple of weeks and will generally look worse that than what makes the headlines.
I have a great idea, lets deport some 30 million illegal immigrants. I just got to see a video on a lib website about an undocumented immigrant making 1100 dollars a week doing concrete framing. Can anybody tell me that this is a job that an American would refuse to do? I really doubt that he is paying taxes on that income due to the ramifications to his employer. The H-1B program is a joke. Disney is replacing American workers to hire lower paid foreign workers and then blacklisting the Americans. Much as I hate to say it, The Donald is right.
Couldn’t have said it better.
So this, along with what my financial adviser called the “Greek Crisis”, must account for the sudden drop in my investments. Who knew?
Unemployment = Free to pursue your dreams
Anybody else find it odd that every time the employment numbers come out the Administration and Leftist’s crow about how great they are and how it is obvious that The One’s Policies are working blah blah blah and then a few months later all of the numbers are revised DOWN.
Happens every time.