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Friday, May 2, 2014

The Real Story

And so the BLS is back to its old data fudging, because while the Establishment Survey job number was a whopper, and the biggest monthly addition since 2012, the Household Survey showed an actual decline of 73K jobs. What is much worse, is that the reason the unemployment rate tumbled is well-known: it was entirely due to the number of Americans dropping out of the labor force. To wit, the labor force participation rate crashed from 63.2% to 62.8%, trying for lowest since January 1978! And why did it crash so much - because the number of people who dropped out of the labor force soared by a near record 988K, the second highest only since January 2012 (curiously the one month when the establishment survey reported a 360K increase in jobs). 
End result: the number out of the labor force is now an all time high 92 million. What is most amusing is that the "persons who currently want a job" was unchanged at 6,146K - even the BLS said it was "puzzled why so many unemployed people are not looking for jobs." We have some ideas, and no, they don't include the addition of 234K "birth/death adjustment" jobs.
Participation Rate:
People not in the labor force:

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