Labor Force Participation Plunges To Fresh 26 Year Low

[stockholmer]

http://www.zerohedge.com/article/labor-force-participations-plunges-fresh-26-year-low

At 64.2%, the labor force participation rate (as a percentage of the total civilian noninstitutional population) is now at a fresh 26 year low, the lowest since March 1984, and is the only reason why the unemployment rate dropped to 9% (labor force declined from 153,690 to 153,186). Those not in the Labor Force has increased from 83.9 million to 86.2 million, or 2.2 million in one year! As for the numerator in the fraction, the number of unemployed, it has plunged from 15 million to 13.9 million (http://stats.bls.gov/news.release/empsit.t16.htm ) in two months! The only reason for this is due to the increasing disenchantment of those who completely fall off the BLS rolls and no longer even try to look for a job. Lastly, we won't even show what the labor force is as a percentage of total population. It is a vertical plunge.

[xchrom]

1. recommend

[BzaDem]

2. You are completely wrong about the labor force. It did not change at all. The only reason the BLS

reported a change is because they added a population adjustment in Jan that they didn't add to December. This is directly from the BLS's website:

"The unemployment rate (9.0 percent) declined by 0.4 percentage point for the second month in a row. (See table A-1.) The number of unemployed persons decreased by about 600,000 in January to 13.9 million, while the labor force was unchanged. (Based on data adjusted for updated population controls. See table C.)"

[fasttense]

3. That does not make any sense at all.

The labor force was unchanged????

What did Americans stop reproducing about 18 to 20 years ago? Did immigration here come to a halt? Have we found the secret to overpopulation?

Come on, does anyone honestly believe that the population hasn't changed in a month? Normally there are about 150,000 new workers entering the job market every month. Where are they now?

I think the BLS was outsourced.

[xchrom]

4. shhhh -- don't upset the Single Narrative.

all is well -- go shop.

[BzaDem]

"Normally there are about 150,000 new workers entering the job market every month."

That is a long term historical average. It is often much higher or lower. Yes, the labor force was unchanged. Deal with it.

[stockholmer]

10. if you think that the actual number of people eleiglible for workforce inclusion didn't grow...

in a nation of of over 310,000,000, then either there was no reproduction going on in the USA 16 years and 9 months ago, there was no legal immigration last month, or a hell of a lot of people more than usual died in America.

Again, riddle me this "Those not in the Labor Force has increased from 83.9 million to 86.2 million, or 2.2 million in one year."

People are simply being removed from the books, especially if you claim the 'official' (U3) rate is going down.

The very thing you point to (the BLS saying the labor force was unchanged) proves my point.

[Statistical]

13. NILF includes retirees (like boomer wave which is begining to retire).

To pretend rising NILF means people can't work is silly. The overhwelming majority of people in NILF indicate they don't want a job.

Still some people are in NILF because they are "discouraged" (didn't look for work in last 4 weeks because they believe they won't get a job). U-4 includes U-3 PLUS discouraged workers and it has declined from 10.3% to 9.6%


"The very thing you point to (the BLS saying the labor force was unchanged) proves my point."
Hardly. IF say 120,000 persons entered the workforce (possibly depressed as more go to college or enter armed forces) and 120,00 persons retire, or become disabled then the labor force would remained unchanged.

The net is unchanged. Nobody is saying there was 0 persons entering and 0 persons exiting.

"in a nation of of over 310,000,000, then either there was no reproduction going on in the USA 16 years and 9 months ago, there was no legal immigration last month, or a hell of a lot of people more than usual died in America."
All strawmen. If less people entered the labor force because more went to college or entered armed forces, and more people than normal retired then net-net the labor force would remain the same.

Not everyone is "NILF" is willing or able to work. The overwhelming majority in their own words indicated THEY DID NOT WANT TO WORK.

[stockholmer]

15. further evidence to my underlying point....."Missing Workers: 4.4 Million Out Of Work And Forgotten"

http://www.huffingtonpost.com/2011/02/04/missing-workers-44-millio_n_818314.html

"Over the last three years, more than 4 million U.S. workers have effectively gone missing.

You won't find their photos on the backs of milk cartons. The Coast Guard isn't out looking for them. No missing-persons reports have been filed. These are jobless Americans who have grown so discouraged by their unsuccessful searches for work that they have simply given up the hunt. They are no longer counted among the 14.5 million Americans officially considered unemployed as of the end of last year, according to the Department of Labor.

Indeed, when the government on Friday delivered its latest monthly snapshot of the labor market for January and calculated the unemployment rate, these people -- a group larger than the population of Los Angeles -- are not even counted. Some are sprinkled into the fine print, counted in categories such as "discouraged workers," but most are invisible.

The past several months have shown strong signs of improvement in the U.S. economy. Manufacturing expended at the fastest rate in seven years in January, the private sector is adding thousands of jobs, gross domestic product is on the rise. The Economist describes the current profit-reporting season as "shaping up to be one of the best ever."

Given these indications of improvement, one might expect that those who felt discouraged months ago would resume looking for employment. But the group of Americans who have given up looking for work is larger than ever.

Last December, the percentage of Americans who were either employed or actively looking for work fell to 64.3 percent, what economist Heidi Shierholz calls "a stunning new low for the recession." Shierholz estimates that 4.4 million Americans are left out of the Department of Labor's official unemployment count because they are too discouraged to continue seeking work.

"We have now added jobs every single month for a year," Shierholz said. "So you would think that there would be labor-force growth, these missing workers starting to come back in. Not only is that not happening, it's actually starting to go in the other direction. There's never been a pool of missing workers this large. It's not clear to me when they'll come back."....................



"The labor force fell by 260,000 in December, and the labor force participation rate fell to at 64.3%, the lowest point of the recession. Incredibly, the labor force is now smaller than it was before the recession started, so the pool of "missing workers," i.e., workers who dropped out of (or didn't enter) the labor force during the downturn, remains large. We can estimate its size in the following way. The labor force should have increased by around 4.2 million workers from December 2007 to December 2010 given working-age population growth over this period, but instead it has fallen by 246,000. This means that the pool of missing workers now numbers around 4.4 million. If just half of these workers were currently in the labor force and were unemployed, the unemployment rate would be 10.7% instead of 9.4%. None of these workers is reflected in the official unemployment count, but their entry or re-entry into the labor force will contribute to keeping the unemployment rate high."........................

[Statistical]

16. False. Discouraged workers are included in the U-4 which has declined over the last year

http://www.bls.gov/news.release/empsit.t16.htm

In January 2011 there are 993,000 discouraged workers. Persons who have not look for a job in last 4 weeks because they don't believe they will get a job or that jobs exist.
In Janaury 2010 there were 1,065,000 discouraged workers.

If we include all those persons into the ranks of the "unemployed" (willing and able to work, looked for work in last 4 weeks)
http://www.bls.gov/news.release/empsit.a.htm

January 2010: 14,842,000 unemployed
January 2011: 13,863,000 unemployed.

Total unemployed + discouraged
January 2010: 15,907,000
January 2011: 14,856,000

Still if that isn't a large enough net lets include everyone who is marginally attached (wants a job but hasn't looked in last 4 weeks including all reasons other than just "discouraged").

Jan 2010: 2,539,000
Jan 2011: 2,800,000

Add those to U-3 ranks.

Total unemployed + discouraged + other marginally attached workers
January 2010: 18,446,000
January 2011: 17,656,000

There is possible metric you can use it indicate that things aren't getting better.

[stockholmer]

17. yes, but at some point, many don't meet definition of 'discouraged','marginally attached' or part-ti...

this is where the millions being stricken from the workforce rolls (even though the population is growing) are disappearing to

To extrapolate this out, you could say that the USA population grows and grows, millions more lose jobs, then don't meet a BLS definition to be included, and you would have an 'official' UE rate going down, but millions more actually without work.

Try telling a person that cant get a job that they don't count because the BLS says so.

Finally, if, as many try to say 'its the baby boomers retiring that is reducing the workforce' then why does the BLS itself say at least 150,000 jobs a month are needed to be created just to keep pace with population?



from the BLS release itself (even this shows a net US population growth of 162,000) AND a increase of those NOT IN THE LABOR FORCE

Table C. December 2010-January 2011 changes in selected labor force
measures, with adjustments for population control effects

(Numbers in thousands)

____________________________________________________________________________
| | |
| | | Dec.-Jan.
| Dec.-Jan. | 2011 | change,
| change | population | after re-
Category | as | control | moving the
| published | effect | population
| | | control
| | | effect (1)
_____________________________________|___________|____________|_____________
| | |
| | |
Civilian noninstitutional population.| -185 | -347 | 162
Civilian labor force...............| -504 | -504 | 0
Participation rate...............| -.1 | -.1 | .0
Employed..........................| 117 | -472 | 589
Employment-population ratio......| .1 | -.1 | .2
Unemployed........................| -622 | -32 | -590
Unemployment rate...............| -.4 | .0 | -.4
Not in the labor force | 319 | 157 | 162



http://4.bp.blogspot.com/_o2H52OH-Kdg/TScZbEZF5uI/AAAAAAAAAqY/YsKs6MIz_Lg/s1600/Screen+shot+2011-01-07+at+9.46.52+AM.png

_____________________________________|___________|____________|_____________

[Statistical]

18. " then why does the BLS itself say at least 150,000 jobs a month are needed "

They don't.

There is no constant requirement for x jobs required each month. The demographics of the US are constantly changing. By 2020 the labor force EVEN WITH FULL employment will shrink. By 2032 (the peak of boomer retirement wave) we could lose 120,000 jobs a month and still maintain full employment.

The idea that there is this magic 150K requirement that remains static across the eons is naive at best.

"from the BLS release itself (even this shows a net US population growth of 162,000) AND a increase of those NOT IN THE LABOR FORCE"
Nothing suprising or alarming about that. The % of the population over age of 65 is increasing and will only continue to increase over time. Unless we significantly increase immigration our labor force WILL SHRINK despite a growing population.

As an example Japan has had a growing population and shrinking labor force for over a decade now as their population ages.

"Try telling a person that cant get a job that they don't count because the BLS says so."
The requirement to be counted is very simple. The line has to be drawn someone.
U-5 (which has declined) includes anyone who has looked for a job at least one time in the last YEAR even if they are currently not looking for work FOR ANY REASON. If someone doesn't meet even that minimum definition then honestly are they part of the labor force?

Should people in prison be considered unemployed, should people permanently disabled be considered unemployed? Should people who haven't looked for a job in a year be considered unemployed? What about 2 years? What about a decade? What about never in their entire life? What about criminals & drug dealers who don't want legal employment are they unemployed?

Obviously the line has to be drawn somewhere. The definition for U-5 is a very minimal hurdle. Still even if you remove effort (any effort) from the definition the number has declined.

Take total employed plus total persons NILF who want a job (even those who have never looked for work). Everyone who simply "wants" a job in their own words.

January 2010: Unemployed 16,147,000 + 6,108,000 NILF "wants a job" (including those making no effort) = 22,255,000
January 2011: Unemployed 14,937,000 + 6,643,000 NILF "wants a job" (including those making no effort) = 21,580,000

[stockholmer]

19. computer burped, same post immediately below, sorry :D

[stockholmer]

20. I never said that the 150,000 was a static number, I do not know anyone who does

Furthermore, if you think that with a decreasing workforce population (which I don't for a second will occur long term in reality) AND a growing real population (including 10's and 10's of millions of aging, sick, sick people) that you are in debt now, well you have not seen anything yet, I am afraid.

[Statistical]

8. Labor force includes people entering and people exiting.

If number of people exiting labor force roughly equal the number of people entering there will be no change.

Another way to look at it:

http://www.bls.gov/news.release/empsit.t01.htm

January 2011
* Employed: 139,323,000
* Unemployed: 13,863,000
* Not in Labor Force: 85,518,000

January 2010
* Employed: 138,511,000
* Unemployed: 14,842,000
Not in Labor Force: 83,479,000

Now not everyone "Not In Labor Force" wants a job. The "NIFL" includes people who are reitred, disabled, or in military.

http://www.bls.gov/news.release/empsit.t16.htm

Discouraged persons NILF
January 2010: 1,065,000
January 2011: 993,000

Even if you include all discouraged persons back into rolls of the unemployed, unemployment has declined over last year.

[stockholmer]

5. no, you are confusing the labour force participation RATE for the total number in the force

over 2.2 million in one year have been dropped from the BLS definition of what makes up the workforce

If 150,000 thousands jobs a month (or roughly 2 million a year) need to be created just to keep up with population growth, then how can you have the so-called unemployment rate go down, on a net 36,000 jobs created?

The labour force in terms of actual people grows every month, yet the government's definition makes these people simply disappear s they run out of UE benefits and /or give up in despair.

Bottom line, cooked books, just like a bank.

[BzaDem]

6. No, not cooked books. You are confusing two entirely different surveys.

The 36k value comes from the business survey, that asks certain questions of medium and large businesses. The 600k figure comes from the household survey, which asks other questions of actual households.

The point is, there are 600k fewer unemployed people this month, and 0 change in the labor force. That means 600k people went from being unemployed to employed.

[Statistical]

7. Benefits have nothing to do with unemployment rate. Period.

People who give up because they are discouraged are not included in U-3 but they are included in U-4 which also declined.

http://www.bls.gov/news.release/empsit.t15.htm

U-4
Jan 2010 - 10.3%
Sep 2010 - 10.3%
Oct 2010 - 10.4%
Nov 2010 - 10.5%
Dec 2010 - 10.2%
Jan 2011 - 9.6%

[stockholmer]

12. they certianly do, if when a person's runs out, & leads to a lack of action needed to be counted

[Statistical]

14. Benefits have nothing to do with unemployment rate. Period.

Lack of action has to do with unemployment rate. If you don't try to look for work a single time in last month you aren't included in U-3 rate.

Still even persons who didn't try to get a job because they are discouraged are included in U-4 which has declined over the last year.
Also anyone who tried to get a job at least once in last YEAR (that would include 99er coming off benefits) and is currently not looking for reasons other than being discouraged are considered a "marginally attached worker". They are included in U-5 which has also declined over the last year.

http://www.bls.gov/news.release/empsit.t15.htm

In summary.

99er who looked for work in last 4 weeks - included in U-3 (which declined)
99er who didn't look for work in last 4 weeks due to being discouraged - included in U-4 (which ALSO declined)
99er who didn't look for work in last 4 weeks for reason other than being discouraged - included in U-5 (which ALSO declined)
99er who was forced to accept part time work due to no full time work being available - included in U-6 (which ALSO declined)

[Safetykitten]

9. From Calculated Risk, not a pessimistic site, but not fantasy belief system here.

"The best news was the decline in the unemployment rate to 9.0% from 9.4% in December. However this was partially because the participation rate declined to 64.2% - a new cycle low, and the lowest level since the early '80s. Note: This is the percentage of the working age population in the labor force (here is the graph in the galleries of the participation rate). The participation rate has now fallen 2 percentage points during the recession - a huge decline."

[Statistical]

11. "partially". Labor participation rate has only declined 0.1%.

Still look at the U-4 rate which includes discouraged workers over longer term.

The U-4 has declined 0.7% over last year (10.3% vs 9.6%)

http://www.bls.gov/news.release/empsit.t15.htm