The views expressed in any article published in this blog are the author's own and do not necessarily reflect the views of Joseph Foster or Bob Lupoli.

Friday, February 3, 2012

Unemployment Rate Drops to 8.3% vs. Labor Force Participation Rate

Joe: unemployment rate dropped BUT… see the opinions from messrs. Santelli & Durden – they say the rate is lower because 1.2 million dropped out of the labor force and are not counted as unemployed any longer. –Bob

Unemployment Rate Drops to 8.3%; Payrolls Jump

By Bob Willis - Feb 3, 2012 9:50 AM PT
The U.S. jobless rate unexpectedly fell in January to the lowest in three years as payrolls climbed more than forecast, casting doubt on theFederal Reserve’s plan to keep interest rates low until late 2014.
The unemployment rate dropped to 8.3 percent, the lowest since February 2009, Labor Department figures showed today in Washington. The 243,000 increase in jobs was the biggest in nine months and exceeded the most optimistic forecast in a Bloomberg News survey. Service industries grew by the most in a year, according to a separate report. “We’ve reached an important threshold here,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “The recovery is for real.”

Record 1.2 Million People Fall Out Of Labor Force In One Month, Labor Force Participation Rate Tumbles To Fresh 30 Year Low

  
A month ago, we joked when we said that for Obama to get the unemployment rate to negative by election time, all he has to do is to crush the labor force participation rate to about 55%. Looks like the good folks at the BLS heard us: it appears that the people not in the labor force exploded by an unprecedented record 1.2 million. No, that's not a typo: 1.2 million people dropped out of the labor force in one month! So as the labor force increased from 153.9 million to 154.4 million, the non institutional population increased by 242.3 million meaning, those not in the labor force surged from 86.7 million to 87.9 million. Which means that the civilian labor force tumbled to a fresh 30 year low of 63.7% as the BLS is seriously planning on eliminating nearly half of the available labor pool from the unemployment calculation. As for the quality of jobs, as withholding taxes roll over Year over year, it can only mean that the US is replacing high paying FIRE jobs with low paying construction and manufacturing. So much for the improvement.

Santelli: Here's What's Wrong With the Jobs Number
FRI 03 FEB 12 | 09:20 AM ET
you know what i said at 308 eastern? we want a million jobs an hour. that's what we want. what we got looked like a good report. i said let's get the calculator out and i did. so did my sources and big blogs many people read like zero hedge. the labor force participation rate if you look at non seasonally adjusted, a fresh low going back to april of '83. if you look at seasonally adjusted a fresh low participation rate going back to december of '81. what does that mean in english? shrinkage. shrinkage. 1.2 million people are now not considered unemployed anymore. they just have left the system. we need to concentrate on the internals and eventually we want to watch the fixed income market to see if some of this sets in as people do their ciphering. back to you.

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