Unemployment rate drops to 7.4%

[yota5]

Today the new jobs numbers came out. The unemployment rate has dropped to 7.4%. Good news says the Obama administration. Not so fast says I. Following is an article that was published the last time the jobless rate dropped. Read it and then you decide if we as a nation are experiencing economic recovery? Or, are we headed down the same path that Detroit, MI is on to economic disaster?

Unemployment Woes: Americans Drop Out Of Labor Force As Job Market Stagnates

 

[Katzndogz]

The reason why Detroit got into the trouble it's in is because they believed that they were in an economic recovery and it was okay to increase benefits and taxes to pay for them. Many of the liberals believe that today and have no idea why they are bankrupt or how they got that way.

 

[Vox]

the math course for libtards does not teach that 7.4 > 7.1?

 

[LordBrownTrout]

Full time jobs disappearing as businesses move employees to part time because of obamacare. Its not pretty.

 

[bendog]

Quick, more regulations.

 

[Mac1958]

.

Only 162,000 jobs created, GDP adjusted down. Ugh.

We've definitely stabilized, but otherwise we're pretty much laying there.

This is now as much psychological as anything else, I'm not sure what pushes us off the fence in one direction or the other. The Fed sees this, so they'll keep printing money. Great.

.

 

[NightFox]

.

Only 162,000 jobs created, GDP adjusted down. Ugh.

We've definitely stabilized, but otherwise we're pretty much laying there.

This is now as much psychological as anything else, I'm not sure what pushes us off the fence in one direction or the other. The Fed sees this, so they'll keep printing money. Great.

.

We need around 150,000 a month just to keep up with population growth and then you've got to dig into the numbers and find out exactly what sort of jobs we're talking about (temporary, part-time, government, etc..,), my guess is once that is done (even using the faux, later to be revised downward numbers that the labor department usually publishes) we'll find that we have yet another month of real negative job growth and labor force participation will decline.

Of course this won't won't stop politicians from waving their pom-poms and trying to spin the actual numbers into something positive, they don't really care if the labor market is improving they only care that they can make people BELIEVE it's improving.

 

[GHook93]

Today the new jobs numbers came out. The unemployment rate has dropped to 7.4%. Good news says the Obama administration. Not so fast says I. Following is an article that was published the last time the jobless rate dropped. Read it and then you decide if we as a nation are experiencing economic recovery? Or, are we headed down the same path that Detroit, MI is on to economic disaster?

Unemployment Woes: Americans Drop Out Of Labor Force As Job Market Stagnates

It's the same old DEMENTED story on the unemployment rate. Horrendous employment numbers, yet the UR goes down because so many people 'leave' the job market! That is not the road to recovery.

To make matters worst the VAST majority of the 162K people hired were in the low waged increasingly PART-TIME retail and food services industry (you know the industry that is striking throughout the country).

Congrats Obama! After 5 years you know OWN this ECONOMY!

U.S. Adds 162,000 Jobs, Continuing a Tepid Run - WSJ.com

 

[NightFox]

It's the same old DEMENTED story on the unemployment rate. Horrendous employment numbers, yet the UR goes down because so many people 'leave' the job market! That is not the road to recovery.

Well put, if you want to get a better picture of where the labor market stands don't look at unemployment look at civilian labor force participation.

Source: Bureau of Labor Statistics Data

Notice the steep downward trend since 2008? and that's AFTER blowing nearly a trillion dollars of tax payer money in Keynesian "stimulus" in 2009.

 

[Moonglow]

yes, that's it, blame one man for the entire economy. We all know the repubs are doing all they can.

 

[NightFox]

yes, that's it, blame one man for the entire economy.

Apparently you missed all the promises that the President has made regarding how he was going to "fix" the economy (I direct your attention to the $800 billion+ "stimulus" as exhibit A), if he doesn't want to get "blamed" for the state of the economy then he shouldn't make fraudulent claims that he can "fix" the economy.

Oddly enough tax payers still expect a real return on their tax dollars and empty promises and excuses won't mollify them forever, eventually the buck is going to stop and the President although an artful dodger can't dodge it forever.

"You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time." -- Abraham Lincoln

 

[bendog]

It's the same old DEMENTED story on the unemployment rate. Horrendous employment numbers, yet the UR goes down because so many people 'leave' the job market! That is not the road to recovery.

Well put, if you want to get a better picture of where the labor market stands don't look at unemployment look at civilian labor force participation.

Source: Bureau of Labor Statistics Data

Notice the steep downward trend since 2008? and that's AFTER blowing nearly a trillion dollars of tax payer money in Keynesian "stimulus" in 2009.

I'm no obama fan, but to be honest the labor force participation is going to drop for the next 10-15 years regardless of anything, and while Scamulus was in large part waste, we did narrowly avert a 1930s round of deflation, and we probably would not have done so it the tea party anti-govt folks been in charge. We saw what austerity brought the EU.

 

[NightFox]

I'm no obama fan, but to be honest the labor force participation is going to drop for the next 10-15 years regardless of anything, and while Scamulus was in large part waste, we did narrowly avert a 1930s round of deflation, and we probably would not have done so it the tea party anti-govt folks been in charge. We saw what austerity brought the EU.

I understand your points and I'm not trying to pin the dramatic decline in labor force participation on the President, simply pointing out two things:

1.) the LFP gives a clearer indication of the labor market than UER
2.) the LFP indicates that the the $800 billion+ stimulus was a complete waste from a labor market perspective (since it had no appreciable effect on the steep downward decline)

As far as averting a 1930's style round of deflation, we haven't averted it, we've just put it off, deflation is the necessary result of the inflationary bubble that we went through. It allows the economy to work off the mis-allocation of capital that has taken place during the bubble and thus adjust to a sustainable forward path, what we've done is just made the pain a bit less, drawn it over a longer period and set the stage for another crash that will be worse than the last one.

Eventually the economic piper is GOING to be paid, the question is do you want to pay his asked for fee now or do you want to pay him a lot more later. Best illustration I can think of is comparing the short but very sharp depression of the early 1920's to the "great depression" of the 30's and then look what the government response was in both cases.

I'd also like to point out that the so called "austerity" in the U.S. is a myth, we are spending more than ever and have been expanding the money supply like there's no tomorrow since this all started. Austerity requires that one actually brings one expenses closer to income and if you use GAAP (instead of the fictitious accounting that the federal government relies on) to look at what the federal government has ACTUALLY been doing it's the opposite of austerity.

 

[nodoginnafight]

Anybody have any numbers on how many of those folks who are leaving the labor force are retiring baby boomers?

 

[NightFox]

Anybody have any numbers on how many of those folks who are leaving the labor force are retiring baby boomers?

The LFP uses a fixed age range for participation and cohort so it's numbers are consistent, the only way it would be skewed to any significant degree is if a statistically significant number of baby boomers were retiring early (which as far as I know isn't the case).

 

[bendog]

Well, my pt was that Labor participation IS NOT a good indicator because of the boomers. Yes, people are retiring earlier, though. There's no doubt job data is dismal. However, we have both increasing productivity for high skills, less need for unskilled, and retirement. Those factors are pretty much not alterable, at least short term.

I don't know whether we've averted or delayed a deflationary episode. We'd better hope for the former. It's unknowable whether the fed will be able to unwind QE, with the result being a lowering of the value of the dollar and an increase in domestic manufacuring and increase in exports.

I meant that the US didn't go the austerity route. Had we done so, while the EU was doing so, imo deflation was the inevitable result. Thank God for Banker Ben and Ted Cruz should be hit with lightening.

 

[NightFox]

Well, my pt was that Labor participation IS NOT a good indicator because of the boomers.

If you have a better indicator please share it since I would be very interested in taking a look.

Yes, people are retiring earlier, though.

This is anecdotal, I've seen no numbers that indicate that baby boomers are having any statistically significant effect on LFP (I'm not saying they don't exist, I'm just saying I have not seen them), if you have numbers I'd be interested in looking at them.

There's no doubt job data is dismal. However, we have both increasing productivity for high skills, less need for unskilled, and retirement. Those factors are pretty much not alterable, at least short term.

You make good points but those things you point out only address some of the WHY, it doesn't change the fact that LFP has fallen to dangerous levels and continues on a steep slope downward trend, this should have everyone very, very worried.

I don't know whether we've averted or delayed a deflationary episode. We'd better hope for the former. It's unknowable whether the fed will be able to unwind QE, with the result being a lowering of the value of the dollar and an increase in domestic manufacuring and increase in exports.

While I appreciate your point regarding QE, the orderly unwinding of the Feds balance sheet is only one of the challenges necessary to avert the next bust cycle (and it's questionable if the Fed will actually be able to pull it off), the bigger factor is that mis-allocated capital remains mis-allocated, if anything it's gotten worse, which means from a structural perspective our economy is unable to operate efficiently since it has resources that have been captured for inefficient and/or unproductive purposes. This happens because the central planners skew market signals in way that send incorrect messages to those that deploy capital (in other words it tells them that they should be
producing X when in reality they should really be producing Y).

I meant that the US didn't go the austerity route. Had we done so, while the EU was doing so, imo deflation was the inevitable result. Thank God for Banker Ben and Ted Cruz should be hit with lightening.

OIC, yes IMHO you were spot on (sorry I misread what you were saying) the US didn't go the austerity route it went in the opposite direction which means when fiscal reality FORCES real austerity (and it will) it will be much more draconian than necessary. This is of course politicians kicking the can down the road and hoping they'll be long gone when said reality has to be faced.

 

[drivebymedia]

Today the new jobs numbers came out. The unemployment rate has dropped to 7.4%. Good news says the Obama administration. Not so fast says I. Following is an article that was published the last time the jobless rate dropped. Read it and then you decide if we as a nation are experiencing economic recovery? Or, are we headed down the same path that Detroit, MI is on to economic disaster?

Unemployment Woes: Americans Drop Out Of Labor Force As Job Market Stagnates

Yes, so fast say I ....

300,000 are retiring each month and dropping out of the work force

10,000 Boomers to Retire Each Day for 19 Years

 

[KissMy]

Full time jobs disappearing as businesses move employees to part time because of obamacare. Its not pretty.

Now more workers qualify for food stamps.

 

[Pete7469]

It's the same old DEMENTED story on the unemployment rate. Horrendous employment numbers, yet the UR goes down because so many people 'leave' the job market! That is not the road to recovery.

Well put, if you want to get a better picture of where the labor market stands don't look at unemployment look at civilian labor force participation.

Source: Bureau of Labor Statistics Data

Notice the steep downward trend since 2008? and that's AFTER blowing nearly a trillion dollars of tax payer money in Keynesian "stimulus" in 2009.

They've spent at the same rate since 2009 every year, s9nce DC can't seem to pass a budget. So basically we've had 5 years of "stimulus" spending that hasn't stimulated shit.

I also notice every time they come out with a "better" rate, the numbers are "revised" a couple weeks later.