Persons Not In Labor Force Who Want Job Now Jumps To All Time Record; Real Unemployment Rate At 12.8%

Tyler Durden's picture

Probably the last chart to bury any doubt about just how truly horrible today's employment data was, comes from a little observed data metric: that showing the number of people who are not in the labor force, but who want a job now. The number just hit 6,643K, a jump of 431K from December, and the highest number in history. These are people that would send the unemployment rate to about 12.8% if they were in the labor force (and, as indicated, looking for a job). Nothing else needs to be said.

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SpeakerFTD's picture

Can you pipe down, Tyler?  Your frequent posting is slowing my machine down as I try to repeatedly hit the <BTFD> button on my ETrade console.

More Critical Thinking Wanted's picture
Persons Not In Labor Force Who Want Job Now Jumps To All Time Record; Real Unemployment Rate At 12.8%

The mystery is, in the face of such horrible job market stats, why do you guys still dispute the Fed's duty to fight high unemployment via monetary easing?


DonnieD's picture

The only unemployment metric helped by monetary easing is bank management and federal workers. Lay off the juice. It's hampering your ability to reason.

SpeakerFTD's picture

Dear Ben,

You can either save the bond market or the stock market, but not both.  

Your choice, mate.


The Market


<Irwin M. Fletcher, you choose.....And I lost again.>


More Critical Thinking Wanted's picture


Do you want even worse recessions, even more frequent ones, like the ones under the gold standard:


And those are just the official stats - who knows what the shadow stats were back then ...


tmosley's picture

Hey, anyone can post a chart.  How about you describe the methods used in constructing that chart?  

Here, I'll do it for you.  Prior to the Great Depression, unemployment rates were not tracked systematically, but rather have since been estimated.  The rates that are reported are generally coincident with U6.

What does U6 look like today, you ask?

Depends who you ask.  Government and private economists vary pretty widely on this subject.  Either way, it looks like you need more critical thinking.

More Critical Thinking Wanted's picture


These kinds of statistics are generally normalized across the whole time period. One data set is:

The rates that are reported are generally coincident with U6.

Typical weasel words. Got any proof that the stats are wrong?

Nor does your argument really cover the frequency and viciousness of bad booms and busts under the gold standard: does the Great Depression with it's 25% peak unemployment rate, 7 million people living in deplorable conditions in Hoovervilles and an estimated 7 million people having died from malnutrition and other effects of the depression tell anything to you?


tmosley's picture

First, your link is broken.

Second, feel free to correct me.  I didn't say the stats were wrong, I just said they should be compared with U6, not U3.

Sorry, You can't blame the Great Depression on the Gold Standard.  We went off of it in the middle (you could no longer trade dollars for gold, or even legally own gold), and it only got worse thereafter.  

Further, we now have unemployment that is every bit as bad as then.  Abandoning gold as money has clearly failed to solve anything.  More critical thinking is needed here.

More Critical Thinking Wanted's picture


Sorry, You can't blame the Great Depression on the Gold Standard.  We went off of it in the middle (you could no longer trade dollars for gold, or even legally own gold), and it only got worse thereafter. 

Sure the crippling deflation stopped after the gold standard was dropped:

Sure unemployment peaked at around the time the gold standard was dropped:

How do you define "it only got worse thereafter"? It did not: Roosevelt got elected, the gold standard got dropped, the funds from the government dropping the gold standard (read: revaluing gold, printing dollars) were used for stimulus programs.

In 1937 there was a second dip, because the depression was declared over and tightening was done too soon. But the huge 1940 stimulus rocketed the economy out of the recession ...

History rarely gets any more clear-cut than that, really.


thedrickster's picture

Care to recount the history of the panic of 1920-21?

Oh wait, State approved history says it never happened. Carry on, nothing to see here.



More Critical Thinking Wanted's picture


Not sure what your point is (we were talking about the Great Depression), but post-war economic cycles often show sharp adjustments: millions of people moving around. There were a few out-of-the-ordinary economic events after WWII as well.

None of that happened around the Great Depression so it's a "clean" example for a full-bore gold standard recession. But you could look at the panic of 1893 graph I cited as well.

If you want to see how a rigid supply of money can cause deep pricing and economic activity problems, and how those problems can go away if more money is introduced see this "economy of POW camps" description:

(It's from 1945, so you cannot blame his description of POW-camp economics on current political preferences.)

It demonstrates how deflationary forces work in practice. The same happened during the Great Depression: people valued gold (which was equal to money) more than they valued engaging in trade and in production. The end result was a crippling spiral of dropping prices, dropping wages, dropping productivity and increasing unemployment - human misery all around, with no constructive purpose whatsoever.


sgt_doom's picture

Thank you, tmosley, and of course you are correct as they now parse down real unemployment to unbelievably fictitious levels.

If they measured unemployment TODAY they measured it during the Great Depression, real unemployment is between 28% to 33% -- at the very least.

And these endless goldbugs are mentally annoying.  Anyone who pontificates about the Great Crash and Great Depression, while ignoring the dramatic effects of Prohibition (1920 - 1933: major tax cut and dark pools laundered through stock exchange), as well as ignoring the effect of securitization, a term not in use back then, but the process was, began around 1909 and really took off in the Roaring Twenties, leading to the Great Crash.


Red Neck Repugnicant's picture


You have repeatedly demonstrated a very peculiar understanding of American banking and monetary history.  You're very good with shallow pundit-style assertions that you've likely heard on various YouTube clips, but your positions break down immediately when confronted with facts and charts.  

This occurs regularly with you.  


Buckaroo Banzai's picture

Hey dope, they didn't have "official" stats back then as the FedGov was about 1% the size it is now, and there wasn't any gigantic propaganda apparatus. Whatever stats we have regarding that time were put together by non-governmental entities or reconstructed by historians.

More Critical Thinking Wanted's picture


The "official stats are falsified" defense - again without proof. Can I add a few more to your list of right-wing facts:

  • the planet is not warming up
  • humans and primates did not descend from the same species millions of years ago
  • global food prices are not going up due to supply & demand
  • 7 million people did not die due to malnutrition and other health problems during the Great Depression

Have I missed any other "fact" you believe in?


HarryWanger's picture

You're fighting a losing battle. I was on here all last week giving reasons why we would see a drop in UE to the low 9%. Of course, I got a million junks. If these guys would just listen to rational data points instead of blindly dismissing every number as a "lie", they might not be so miserable.

ColonelCooper's picture

Why don't you explain the math then? 

More Critical Thinking Wanted's picture


Well, lets be balanced with today's NFP stats: they are really bad.

UE might have dropped from 9.5% to 9.0% but that's probably because people stopped looking for work - i.e. their stats went over into the U6 category and got out of the official UE category.

I am somehow not convinced that U6 is rising due to people retiring early or taking a leisure break from work, to enjoy the fruits they earned in the last 2 years. (unless you count 10,000 bankers.)

I think people dropped out from under the radar of unemployment stats because they live in regions where it's impossible to find jobs, and where it's not possible to sell their homes either to migrate to another state. They fell out of the 56 weeks of unemployment coverage and are now trying to keep up with the odd job here and there and are hoping for better times.

I.e. the housing bust has made the US labor force less mobile, and that is bad, very bad.

Those kinds of shifts in the labor force are very worrying, because they foreshadow a Japanese type deflationary story: rising long-term unemployment, rising youth unemployment and a whole new generation of youth who cannot find a real job and does not know what hit them - and who can not be blamed for the situation ...

If my hypothesis is right then within a few quarters we might start seeing a steady rise in petty crime: 'odd jobs' tend to fluctuate, and when there's a "you will now starve" kind of liquidity squeeze on a family then often the only option is crime.

Lets also be clear that the naive Ron Paul suggestion of a gold standard would only make deflation even worse and would guarantee that the rich stay rich - essentially forever.


ColonelCooper's picture

I think your take on the stat. is correct for the most part.  That's why I get pissed at Harry (I think this is the real one anyway) for trying to spin it as positive. 

You and I have had discussions about the other portions of your comment, and know where each other stands.  Good luck to you.

HarryWanger's picture

Well, lets be balanced with today's NFP stats: they are really bad.

Actually, when you remove the weather factor (and yes, the worst snow storms in history in 1/3 of the country HAVE to be considered in this report) then it was a fairly solid report. CE gives a very unbiased look at this report with a solid breakdown and comes to a similar conclusion.

DonnieD's picture

How many jobs do we need to create a month to keep up with population growth?

ColonelCooper's picture

Harry.  raps hard on Harry's head three times and shouts, "Hello McFly"....

The math isn't there Harry.  Even if you want to factor in weather, (as noted earlier, we've never heard about good weather accounting for squat) the jobs created doesn't add up to the percentage drop.  Do you want to comment on that, or simply pump your side of the argument?

HarryWanger's picture

There is no "math" to explain here. You have a survey and a set of numbers. When one considers weather AND the fact that the survey takes into account the self employed, you can't rely on numbers when that latter component is missing from the data set.

Also, every other report, ISM, etc., has shown increases in employment components. If anything, the governments number was the outlier since every other data point supports the 9% unemployment number.

More Critical Thinking Wanted's picture


I'm not as optimistic as you - but if you are right then next month's NFP should show an above-average uptick (to average out the weather effects).

So if there is no uptick then your current explanation for the bad NFP numbers can not hold up.

Do you agree?


HarryWanger's picture

Yes, I agree. Next month we will see a rather large number and the 9% rate will make a lot more sense to everyone.

ColonelCooper's picture

That's fine, Harry.  Factor in everything that might support the figure you want to hear, and ignore that U6 rose by more than U3 dropped.  But hey, we created 36,000 jobs.  Green Shoots!!

Also, removing self employed persons from figure is fine, but you are unable to look at the ledgers of said self employed.  They aren't all selling astonishing numbers of curtain rods.

You are much worse about cherry picking than the people you argue with.  You may be making money, and if so, more power to you, but your continued refusal to acknowledge anything that isn't rose colored is somewhat laughable.

More Critical Thinking Wanted's picture


Well, next month's NFP numbers will test all these hypotheses AFAICS.


ColonelCooper's picture

And regardless of the outcome, Harry will find a way to spin it into a dazzling rainbow.

More Critical Thinking Wanted's picture


If so then it will be pretty obvious though.

This is a testable claim and if there is no uptick next month there's no valid excuse left really: QE2 is ongoing and working, the global climate is positive, the US economy is growing.


thedrickster's picture

So even after completely destryoing the central bank's balance sheet with toxic paper and pushing the treasury to insolvency, sycophants celebrate a 9% rate, 16% U6 and the lowest participation rate in 27 years?

Allow me to pose a question to those that still want the Fed(s) to have a future on this landmass, was it worth it?

HarryWanger's picture

...was it worth it?

Well, yes. It gets the machine cranking. That's the whole point. That's why it's called "stimulus". You can't say it's failed until it's taken away. If the economy continues to slowly pick up after it is removed, and I fully believe it will, jobs will also improve. That's the point of stimulus - you can't start a fire without a spark.

thedrickster's picture

The machine already beaten down by decades of graft, neglect and often times scorn was on its last legs. You really don't see the end game do you? The fire you started is going to burn the mutha down.

Moreover that is super cool theory and all but "it would have been worse" isn't much in the way of empircal evidence to support your hypothesis.

Boxed Merlot's picture

That's the point of stimulus - you can't start a fire without a spark...

I've thought of the increase of FRNs as liquid, not fuel, spark or consuming fire. In my model, this extraordinary amount of liquidity is and has been injected into a sub zero environment, i.e. Fed lap-dogs. This excess is frozen and may as well never have been conjured up in the first place if all it's doing is sitting in some ledger sheet to placate some random BIS "requirement".

If it were to ever heat up and the whole lot melted at once, well, then I hope the Bernanke has enough Barwney towels to sop up that mess.

As it is, I still hold the US mints should get out of the "collectibles" business and begin coining intrinsically valuable money, whether Au, Ag, Cu, I don't really care. In addition, if the US Treasury department were to start issuing US dollar notes redeemable in said currency, we may see a return of the real Mr. Market.

I just don't believe the BIS will stand for a level playing field however, instead they'll propose additional enslavement products like the 50 and 100 year slave notes mentioned earlier.

More Critical Thinking Wanted's picture

Allow me to pose a question to those that still want the Fed(s) to have a future on this landmass, was it worth it?

Yes, hands down.

Had the Fed and the USG been as decisive as Chinese and German authorities stimulated their economies, the US might be seeing this kinds of unemployment stats:

and this kind of productivity growth after the recession:

So yes, stimulus makes quite a difference - if you implement it and if you do not have a GOP who is sabotaging it all the way.


thedrickster's picture

Respond to my lengthy post on newspeak bitch, you invoked one of the arguements which I expressly prohibited you from invoking.


More Critical Thinking Wanted's picture


I have answered it below (you are confused about Japan as well, as usual), although I should probably not have taken your bait trolling for me.

Btw., it's pretty telling that you called your 5 meager sentences a "lengthy reply" :-) You must be used to writing Twitter messages only, so trying to write up a coherent argument must have been pretty taxing on your attention span, right?


thedrickster's picture

It was post #934972 dipshit though obviously obfuscation is your game


DonnieD's picture

How much money did Germany spend on stimulus projects?

thedrickster's picture

I feel compelled to call you out on your terminal case of correlation as causation. Your assertion is that Germany recovered because of stimulus, its position as a net creditor, producer for export and the stimulus as a % of GDP being tiny when compared to US itches brew of stimulus, QE1 & QE2 and the collaterialization of the currency by toxic MBS and Treasury Paper of course bearing no relevance. Only through stimulus did Germany post a recovery and the US problem was of course, not enough.

Has an economy ever recovered from a liquidation event without stimulus? On the flipside has expanding the monetary base ever failed to produce growth?


Is this merely correlation or is there a P Factor here worth considering:



More Critical Thinking Wanted's picture


Is this merely correlation or is there a P Factor here worth considering:


You apparently still do not understand why the Japanese bank-stimulus and easing attempt of 1999 did not work, right?

Here's a list of the various stimulus and QE efforts implemented in big economies of the world - I have left the Japanese one at the end so that you can see the difference to the others:

The German stimulus was efficient because it essentially worked via wages: the stimulus was entered via KA (short-work) government programs, which money was spent by millions of consumers directly. (You saw the graph I linked to - the stimulus worked phenomenally.)

The Chinese stimulus was efficient because it's a broad-based export industry subsidy in essence: the main form of the stimulus was the weak yuan. (There were outright development programs as well, to the tune of hundreds of billions of dollars - but the main stimulus was the FX rate which is kept artificially low via capital controls.)

The US stimulus and QE was not as efficient IMO but still worked reasonably well: US bonds were mainly owned by US companies (to the tune of 1 trillion dollars), so shortening their maturity and thus pushing liquidity out of long bonds and into investments and equities indirectly stimulated the economy. There was explicit stimulus spending by the USG as well, with various grades of efficiency.

(Estimations are that the stimulus efforts were about 50% as strong as Germany's stimulus and only about 25% of China's stimulus. So it was borderline efficient - and the recovery in the labor market is sluggish partly due to this.)

The Japanese stimulus/QE of 1999 was wholly inadequate: the monetary base was more than doubled mechanically, but the funds remained 'stuck' at the largest Japanese banks - 90% of the funds remained in only a dozen of them. Little of the stimulus flowed into the real economy: banks were not lending because companies did not grow, and companies did not grow because banks were not lending - a catch-22 scenario. The banks were saved from insolvency, but the rest of the deflationary damage to the economy was not fixed.

Here's a graph of Japanese M0 and M2 in that time period, that demonstrates the Japanese problem:

See how M0 (money at banks) got almost tripled, still it had little effect on M2 (money in the real economy)? In the "POW-camp economy" article that I've linked to above this is equivalent to tens of thousands of cigarettes being distributed but kept locked away in the Canteen and only handed out once there was enough trade.

So all these scenarios and historic examples are well-researched and well-understood, it's just that you refuse to read and refuse to think for yourself. It's a petty because you seem smart otherwise, but it's not like I can force you to think, right? What I can do is to expose your confusion for everyone to see.


thedrickster's picture

And you COMPLETELY gloss over the relative creditor positions of China/Germany as compared to the US in 2011 in terms of actual stimulus and wander off into a rich ocean basin of red herring. Now for the rest;

Moreover "(Estimations are that the stimulus efforts were about 50% as strong as Germany's stimulus and only about 25% of China's stimulus. So it was borderline efficient - and the recovery in the labor market is sluggish partly due to this.)"

This complete BS in any quantitative terms. Germany's stimulus was around 1.6% of GDP, the US close to 3%. The redistribution of wealth was agreeably conducted in a more focused and effective fashion and as the Eurozone Creditor the Germans were able to give away other people's money without indebtting their infant grandchildren.

All the while you live in a fantasy world in which correlation equals causation (when of course the correlation is convenient to your world view). Germany recovered BECAUSE, Germany recovered IN SPITE...who is to say? Your earlier reference to FDR's treasonous gold confisc and "premature monetary tightening" as empiracally proven, historically validated "solutions" suggests to me that your forgot the 800 pound gorilla of a punchline in that room, a fucking world war as additional stimulus.

China - Your charecterization of the Yuan peg as stimulus is absurd. This is not an acute, tactical action, this is a long term, strategic sodomization made possible by American's subsidized preferences to consume. This is ridiculous, if you want to talk about China's actual stimulus by all means, again as a massive creditor nation investments in infastructure without additional debt load is completely irrelvant to this discussion. Apples and muthaforkin oranges.

Your assertion that Japan's 1999 efforts were simply too small is the epitome of refusing to think for yourself, it is Keynesian academic group think to the Nth degree.

As always Court Intellectuals fail to even acknowledge the Austrians and their hypothesis grounded in empiricism, that the both the Lost Decade Japan and the US 2007-20** are simply additional examples of a centrally planned economy suffering from the crippling effects of systemic malinvestment. Japan's growth is still crushed under the weight of zombie banks and zombie industry, now how as someone who spends half of their fucking day on and St Louis Fed websites do you fail to see the trend here?


Enjoy your zombie recovery, I am long physicial, tactically long commodities and am desperately awaiting the last gasp dollar rally to short the shit out of your fantasy and go levered long on the former.


And again it was #934972 bitch.


More Critical Thinking Wanted's picture


The only part of your rant where you managed to cite hard facts was:

Germany's stimulus was around 1.6% of GDP, the US close to 3%.

Although you do not cite any sources for your data.

Anyway, the figures you claim are entirely bogus.

Here's some real data, showing that during the peak of the crisis the German government spent nearly twice as much as the US government:

The figures show all levels of government spending, so it's apples to apples.

(I wont bother debunking your other arguments, they are neither particularly coherent, nor backed by data.)


lunaticfringe's picture

Ultimately, a few years from now Harry, everyone will run out of government largesse and no longer be counted. They will be mowing lawns and cleaning toilets, getting cash. The government will proclaim the unemployment is at 4% and guys like you will be carrying their water. This economy is some bastard child, invented by the Bernank and designed to break the Chinese peg. That's it. You go ahead and believe any BS you want.



tmosley's picture

Nice ad hominem.

Care to use some more logical fallacies?

Use some critical thinking, boy.

thedrickster's picture

"global food prices are not going up due to supply & demand"

Really dude? Every fucking commodity on the planet is perfectly correlated post QE2 and yet you stick with Krugmanian line of "global economic recovery".

No you're right, I am sure that exploding WTI inventories and the capsizing Baltic Dry are both strong indications of rising demand and that the price of wheat, rice, copper & silver are just expressions thereof.

Clearly Krugman had it right, it's demand dummy, not the Bernank's hot money coursing through the arteries of the world econcomy. Your type is guilty not of willfully blind ignorance and faith in established thought, just disingenuity.


tellsometruth's picture

Well, have you ever heard of the term blowback? Unintended consuquences? Or remeber The Feds other Mandate to get everyone with a pulse a house????  BOOm & Bust is how we have been trained to think of an economic realities.

How about a sustainable real recovery from the fraud inducsed collapse of credit.  One that does not involve blowing bigger bubbs