The Federal government released economic data for September late last week.\u00a0\u00a0 So, happy days are here again, right? The US economy is going great guns, yes?<\/p>\n
Two words:\u00a0 um, no<\/strong>. \u00a0 As has been the case for the last 7 years, the economy . . . remains in the freaking toilet.<\/p>\n There was one change, though.\u00a0 The US labor participation rate did not<\/strong> remain at 62.6%<\/a> <\/em> last month.\u00a0 Rather, it declined further<\/u>:\u00a0 to 62.4%. Once again, that\u2019s the lowest the US labor participation rate has been since October 1977 \u2013 or early in the Carter Administration. It also marks the 18th consecutive month<\/span> that the labor participation rate has been at Carter-esque sub-63% levels.<\/p>\n This means only 62.4% of the US civilian labor force is actually working or actively looking for work. As noted above, it\u2019s also a 38-year low \u2013 which now has been the case for four straight<\/em> months (July, August, and September’s labor participation rate of 62.6% were all previously tied for the lowest since October 1977).<\/p>\n As noted above, the US labor participation rate has also been at or below 63% for a full \u00a0 And on top of that, job creation was far less than expected.\u00a0 Meanwhile, the US \u201cofficial unemployment rate\u201d remained at 5.1%.<\/p>\n That last is not<\/em> good news.\u00a0 The \u201cofficial unemployment rate\u201d remaining steady at 5.1% is not, as some might claim, in and of itself an indicator of economic progress. By itself, the \u201cofficial unemployment rate\u201d is absolutely worthless as a measure of the economy\u2019s actual performance; it tells you virtually nothing about the underlying economic reality.<\/p>\n That’s because the \u201cofficial unemployment rate\u201d \u2013 U3 \u2013 is calculated using only those who are \u201cactively looking for work\u201d but who are unable to find employment.\u00a0 \u201cActively looking for work\u201d is defined as looking for work within the last 4 weeks<\/a><\/em>.\u00a0 However, if someone has gotten completely discouraged and has quit even trying to find work, they\u2019re not counted at all for U3 purposes. \u00a0The labor participation rate, in contrast, accounts for them.<\/p>\n So, when the “official unemployment rate” stays steady at the same time job creation is too weak to keep up with new entrants, that means more people left the workforce than entered.\u00a0 With a growing population, that implies a rather sick economy.<\/p>\n Those who quit looking for work still exist, of course.\u00a0 And at some point in the future, they\u2019ll almost certainly start looking for work again.<\/p>\n U3 is such a p!ss-poor measure of actual economic performance that it\u2019s even possible for the \u201cofficial\u201d unemployment rate to decline<\/em> at the same time the economy is actually losing<\/span> jobs.\u00a0 I\u2019ve provided a short, simplified example showing how this can occur in this past article<\/em><\/a>.<\/p>\n That’s essentially what’s been happening over the past several years.\u00a0 The US labor participation rate has gone down by 3.3% since January 2009.\u00a0 Since there are roughly 251 million individuals in the US civilian labor force today, that means a huge number of Americans who should be out looking for a job have become so discouraged they simply aren\u2019t even bothering to try.\u00a0 However, if and when conditions actually show some real improvement many of them will start looking again \u2013 and the unemployment rate will jump.\u00a0 That<\/u> is when you\u2019ll know a recovery has really started.<\/p>\n One last bit of “good news”:\u00a0 remember those \u201cexcellent\u201d job creation numbers for August and September we heard so much about?\u00a0 That were higher than projected?\u00a0 For some reason, they were revised downward last month – substantially. Due to either error or design, the original numbers apparently were not even close to being correct.\u00a0 And it gets even “better”:\u00a0 those revisions now seem to indicate a possible 3-month downward<\/em> trend in monthly job creation by the economy.\u00a0 If that’s really the case, that’s NOT good news.<\/p>\n Recovery?\u00a0 The correct response to anyone who talks about any “current economic recovery\u201d is exactly the same as it\u2019s been for the past 7 years: \u201cWhat <\/em>freaking economic recovery?\u00a0 So far, there hasn\u2019t been an economic recovery<\/u>.<\/p>\n All we\u2019ve seen is economic stagnation, along with people becoming discouraged to the point of giving up on even looking.\u00a0 And on top of that, wages have been generally declining in real terms the whole time – and in current-dollar terms last month as well, though only slightly.<\/p>\n It\u2019s been almost 6 years and 9 months, Mr. President.\u00a0 Are we ever<\/u><\/em> going to see any real economic progress under your\u00a0\u00a0\u00a0\u00a0 group of feckless fools and clueless tools<\/span>\u00a0\u00a0\u00a0\u00a0 Administration?<\/p>\n Eh, don\u2019t bother to answer.\u00a0 I think we already know the score.<\/p>\n","protected":false},"excerpt":{"rendered":"two years<\/del> \u00a0 18 months now.\u00a0 We never saw\u00a0that<\/em> during Carter’s catastrophic economic mismanagement.<\/p>\n