The labor force participation rate is the percentage of working-age persons in an economy who:
- Are employed
- Are unemployed but looking for a job
(Labor Force Participation Rate - decline is a bad thing)
The unemployment rate, in August, fell from 7.4% to 7.3% (please see economy tab). The decline is not due to the fact that more people are finding jobs, it is declining because individuals have given up looking for jobs. When you just give up, you are not included in the unemployed statistics. In August, the size of the workforce declined by roughly 300,000. The participation rate fell to its lowest rate since August of 1978, 63.2% from 63.4% in July. When this percentage declines, it's a bad thing.
The employment, or unemployment, situation continues to be troubling. The numbers get reported but do not seem to reflect what is actually taking place in the economy ... people need jobs, good jobs. The August payrolls report had the US economy adding 169,000, while not much below, it is still less than the 180,000 that most economists had predicted. The smartest still can't get a handle on this complex paradigm. Numbers continue to get revised from previous months. Revisions included adjusting down for 74,000 jobs to the previous two months’ reports. June payrolls grew by only 172,000, rather than 188,000; July’s grew by only 102,000, instead of 162,000. The result, you can make things look better if you continually change your starting point and then use the 'wild card' to remove those who have just given up. At SSWM we call it - Fun with Formulas.
Possible impacts of this dismal reality:
The employment, or unemployment, situation continues to be troubling. The numbers get reported but do not seem to reflect what is actually taking place in the economy ... people need jobs, good jobs. The August payrolls report had the US economy adding 169,000, while not much below, it is still less than the 180,000 that most economists had predicted. The smartest still can't get a handle on this complex paradigm. Numbers continue to get revised from previous months. Revisions included adjusting down for 74,000 jobs to the previous two months’ reports. June payrolls grew by only 172,000, rather than 188,000; July’s grew by only 102,000, instead of 162,000. The result, you can make things look better if you continually change your starting point and then use the 'wild card' to remove those who have just given up. At SSWM we call it - Fun with Formulas.
Possible impacts of this dismal reality:
- Entitlements - a little bit of a Ponzi Scheme, where today's workers pay for the current commitments and funding for programs such as Social Security and Medicare. Less participants means less funding.
- Fed Tapering Delay - potentially, and should, cause the Federal Reserve to delay its plans for tapering its $85 billion-a-month bond-buying program. At least the bull run may continue?
- Shit Jobs - August job growth was in retail and food services, which typically offer low-paying and part-time jobs (please see Charts tab).
Direct from the Employment Report (or should we call it the Unemployment Report):
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Within leisure and hospitality, employment in food services and drinking places continued to trend up in August (+21,000). Over the year, food services and drinking places has added 354,000 jobs.
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Among the major worker groups, the unemployment rates for adult men (7.1 percent), adult women (6.3 percent), teenagers (22.7 percent), whites (6.4 percent), blacks (13.0 percent), and Hispanics (9.3 percent) showed little change in August. The jobless rate for Asians was 5.1 percent (not seasonally adjusted), little changed from a year earlier.
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The civilian labor force participation rate edged down to 63.2 percent in August. The employment-population ratio, at 58.6 percent, was essentially unchanged.
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Among the marginally attached, there were 866,000 discouraged workers in August, essentially unchanged from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.5 million persons marginally attached to the labor force in August had not searched for work for reasons such as school attendance or family responsibilities.
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Within leisure and hospitality, employment in food services and drinking places continued to trend up in August (+21,000). Over the year, food services and drinking places has added 354,000 jobs.
_
Among the major worker groups, the unemployment rates for adult men (7.1 percent), adult women (6.3 percent), teenagers (22.7 percent), whites (6.4 percent), blacks (13.0 percent), and Hispanics (9.3 percent) showed little change in August. The jobless rate for Asians was 5.1 percent (not seasonally adjusted), little changed from a year earlier.
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The civilian labor force participation rate edged down to 63.2 percent in August. The employment-population ratio, at 58.6 percent, was essentially unchanged.
_
Among the marginally attached, there were 866,000 discouraged workers in August, essentially unchanged from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.5 million persons marginally attached to the labor force in August had not searched for work for reasons such as school attendance or family responsibilities.
The data is dry as toast, we understand that. Do sketch it out on paper. Look at the size of the numbers for those out of work, look at the number of jobs we are adding, review the jobs that are being created. This economy could use a little butter and marmalade itself. This is major reconstructive economic surgery with at least another 5 years of physical (fiscal) therapy ahead.
Who's making you breakfast? Sua Sponte.
Who's making you breakfast? Sua Sponte.
Bradford C. Bruner for Sua Sponte Wealth Management
