Payrolls Plunge To 88K, Biggest Miss Since December 2009, Participation Rate At New 30 Year Low Change we can believe in. So much for "open-ended QE driven recovery". Moments ago the March Non-farm payroll hit and it was a doozy, printing at 88K, below the lowest forecast of 100K, well below the expected number of 190K, and a tragedy compared to the February revised print of 268K (was 236K). This was the biggest miss to expectations since December 2009 and the worst print since June 2012. The unemployment rate declined to 7.6%, but this was due entirely to the collapse in the labor force participation rate, which declined by 20 bps to 63.3%, a new 30 year low. And now the time to come up with excuses is here. Link
Today, we got the laughable news that the unemployment rate declined even as those not in the labor force grew by over 660,000, while the total civilian non-institutional population grew by just 167,000 to 244,995, meaning the actual labor force declined by 496,000. Which is precisely the issue: fudging the labor force participation rate is how the Obama administration has managed to maintain the myth the economy has grown under his leadership for the past 4+ years. It hasn't, and in fact if one renormalizes for the recent long-term average participation rate of 65.8%, one gets a very different number. How different? A difference that is now at a record compared to what is reported. As the chart below shows, a "renormalization" process indicates a massive and record 4% difference between the reported unemployment rate of 7.6%, and what the real unemployment rate is assuming normal growth of the labor force, which in March was 11.6%, up from 11.3% in February, and the highest since August 2012 when it was 11.7%. More importantly, as the real unemployment chart shows, the economy has not improved by one bit since 2009! Link
But the unemployment rate went down. Urrah Comrades, we are well on our way to zero unemployment. Dasvidania Comrades.
Maybe some day politicos will wake up to the fact that "wealth redistribution does not lead to growth". In fact, quite the opposite.
Obamanomics at work! While Bernanke pumps $85 billion a month into the banks and hopefully some is finding it's way into the economy and not just the stock market, Obama works to destroy the economy with Obamacare, costly regulations and just plain stupid policies. It's the Ying and Yang of government working against each other. BTW, the labor participation rate is now the lowest in over 30 years which ironically last occurred under Carter.
The Scary Thing Is That This Bad Jobs Report Wasn't Even About The Sequester The March jobs report has come in very mediocre. It'd be nice to blame the sequester (the automatic spending cuts that started in March) but it doesn't even appear to be about that. A series of tweets from WaPo's Zachary Goldfarb points out that this really more likely to be about the expiry of the Payroll Tax Holiday (as the job losses fell in the retail sector) rather than the sequester (seeing as there was not a big decline in professional services). This jobs report is more a story of the impact of the payroll tax hike than the sequester. â Zachary A. Goldfarb (@Goldfarb) April 5, 2013 So while retail fell 24K, that was not the case with professionals services. Professional and business services, which includes lots of gov't contractors, was +51k jobs, well within its recent range. â Neil Irwin (@Neil_Irwin) April 5, 2013 When/if the sequester bites, then that's yet another area for a let down. Read more: http://www.businessinsider.com/weak-jobs-report-not-about-the-sequester-2013-4#ixzz2Pb7fEkgx
US Labor Force Participation Rate, 1948-2011, by gender <img src="http://upload.wikimedia.org/wikipedia/commons/thumb/a/a2/US_Labor_Participation_Rate_1948-2011_by_gender.svg/720px-US_Labor_Participation_Rate_1948-2011_by_gender.svg.png"> Now how did zerohedge make their chart look so much "scarier"? ; )