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90.5 Million Out Of Labor Force, As Half A Million Drop Out In One Month; Labor Force Participation Rate Plunges To 1978 Levels

Record 90.5 Million Out Of Labor Force As Half A Million Drop Out In One Month; Labor Force Participation Rate Plunges To 1978 Levels

Submitted by Tyler Durden on 09/06/2013 08:47 -0400

While the Establishment survey data was ugly due to both the miss and the prior downward revisions in the NFP print, the real action was in the Household survey, where we find that the number of people not in the labor force rose by a whopping 516,000 in one month, which in turn increased the total number of people outside the labor force to a record 90.5 million Americans.

And what is even worse, the Labor Force Participation Rate declined from 63.4% to 63.2%: the is the lowest print since August 1978!

Whether or not this means the Fed will continue QE at this point is largely irrelevant: what is more relevant is that the Fed so far has failed miserably at its core mandate: to boost real employment.


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Some related figures

Total Working Age Population = 243 million

Total Private Sector Employees = 114 million

Thus, 129 million people of working age are either unemployed or working for government. In other words, each productive person is supporting 1.13 unproductive persons (not including children and elderly).

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."

Not to play devil's advocate

Not to play devil's advocate here, but we should naturally see a decline in the employment participation rates. Baby boomers are retiring and nearing retirement. There are 10-15% more of them than the younger generations, so unless we bump up immigration, the labor participation rates should drop.

I know in the case of my mother, she lost her job in 2009 at the age of 61. Since then she's taken up part time jobs (underemployed) and now that she is 65 she is on social security and able to live off that, thus off the rolls.

The problem of statistics

You have a very good point. Another that should have been mentioned in original post is the comparison of baby boomers to the youngsters that should be stepping up to fill rolls. 'By the numbers' based on totals might show a completely different trend than by the reality of ages. Although I can appreciate the base info of the original posting for showing the trend of lack of workforce participation, I have a problem with using any 'statistics' as a real point of relevant information. Statistics can be 'proven' for whatever point you want to make. Anyone who has taken a higher level Statistics class will understand with the related low class scores of everyone who thought the class would be so easy. Statistics are perception and no article should ever carry much weight basing its 'truth' of individual perception. The real information and truth of information get so deep so fast that many have no hope of finding truth by publish of statistics. Every variable changes the outcome to such an enormous degree that intuition is required to prove truth. Which means that that subjective proven truth is also open to interpretation. Think the Bible. Truth in form, yet has been twisted to major interpretation.