People Not In Labor Force Soar To Record 91.8 Million; Participation Rate Plunges To 1978 Levels

Tyler Durden's picture

Curious why despite the huge miss in payrolls the unemployment rate tumbled from 7.0% to 6.7%? The reason is because in December the civilian labor force did what it usually does in the New Normal: it dropped from 155.3 million to 154.9 million, which means the labor participation rate just dropped to a fresh 35 year low, hitting levels not seen since 1978, at 62.8% down from 63.0%.

And the piece de resistance: Americans not in the labor force exploded higher by 535,000 to a new all time high 91.8 million.

The jobless, laborless recovery continues to steam on.

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Borrow Owl's picture

"This means 38% of citizens of working age do not pay taxes."

Lucky bastards.



booboo's picture

Because you ain't a bank and banks are people and banks too, The squid was turned into a bank overnight to qualify for tarp. Now top that!

TBT or not TBT's picture

The banks park it at the fed. The FSA would bid up real products and services, though not likely products and services of lasting utility. There's a reason they clamor and vote for free shit.

czardas's picture

I dislike the Fed, Obama and debt as much as the next person but the underlying (and growing) reason for unemployment is disruptive technology.  When companies like Netflix (over $100B) can flourish with 2,000 employees, this says volumes.  It will get worse since the vast majority of jobs to be replaced are the very ones so many Americans are doing.  The Fed has psychologically damaged us - replacing eager, upwardly mobile, aspirational citizens with tired zombies whoose goal is to get to the next day while trusting the delusion that we can live beyond our means forever.   

I am investing in my third startup and interestingly all have involved former military men with discipline, critical thinking and the ability to prioritize - abilities lacking in the political class.  No constant bragging about what they've done, what might happen, how they want to save the world while vacationing in Tahiti.  In the long run...I am optimistic Americans will findn solutions.  

Stuck on Zero's picture

Disruptive technology has never reduced the number of jobs in all of history.  The two largest technology disruptions in history were mechanized farming and the fractional horsepower electric motor.  Between them they should have eliminatd 80% of all jobs.  They didn't.  The only thing that eliminates jobs is the elimination of the incentive to work ... and governments excell at that.


Ignatius's picture

"The only thing that eliminates jobs is the elimination of the incentive to work ..."

Right, to a point, but markets are coveted and controlled and restrict entry.  Kid can't even open a lemonade stand nowadays.  Secondly, the competition from foreign mfg goods that utilize absolute wage arbitrage advantage and enter US markets without penalty.

Perverse incentives yield perverse results.

SAT 800's picture

Jeez, it's amazing that people just can't get it. Clinton signed a most favored nation treaty for China, the most important aspect of what we were taught to call globalization, this was done at the demand of the ruling class who want to sell into the dollar market using labour that gets paid slave wages; their dream come true. it's not that complicated. Another aspect of the same ruling class control we can see right now is "Amnesty"; it obviously has only one purpose to prevent wage rises. Nothing will improve until you regain control of your country and cut off the ships from China. The nation that manufactures, prospers, it's called value added. The nation that buys the manufactured product goes bankrupt. this was the basis of the British Empire, which we are now running in reverse, bankrupting ourselves.

Buckaroo Banzai's picture

Clinton selling us out to China is part of the story, but only part. Obama is mercilessly punishing every single productive element and aspect of society, and showering freeloaders on the bottom end and the corrupt at the top end with a downpour of fiat dollars. That is what has changed in the last 5 years.

Every President has played a part in this sorry tale since Lyndon Johnson invented the War on Poverty. Even Reagan-- the greatest President of the 20th century-- has to shoulder some of the blame. Clinton, Bush2, and Obama have just been epically bad. Obama is an out and out communist and foreign agent who couldn't do more to ruin the country if he tried.

The Proletariat's picture

"I am investing in my third startup"....third time's a charm.  Good Luck!

SAT 800's picture

Please understand the purpose of the post; which is not "political" in the usual sense. What is the problem? the problem is "free trade" with China. There's no particular reason why the Chinese can't be up to their knees in shitty cold water trying to plant enough rice to keep from starving to death next year, whiile we continue to enjoy the highest standard of living in history. This was the situation when I got out of high school in 1960. We exported shoes to China in 1960; and imported nothing. nothing, whatsoever. There are a lot of jobs that need to be done, such as making our own underwear and socks and shirts, and etc. etc. Clinton was a particular watershed moment; poor old Reagan had no idea what was going on. but the important point is; what is the problem? the problem is buying manufactures from China, or anywhere else; but the ruling class chose China for obvious reasons. You could shoot every Banker and Speculator in the world and you'd have exactly the same problem you do now. Surprisingly enough the free-loaders on the bottom end are not actually the problem; although it would be easy enough to put them to work, if we were taking care of ourselves instead of financing Chinese Industry. The fact that this is an on-going situation is revealed by the "Amnesty" legislation; obviously this has one and only one reason to exist. I don't have answer. A patriotic president would meet the same fate as JFK. The stooges we get to elect now are vetted by the ruling class and agree to sell out their country; a very, very bad situation. The propaganda barrage has succeeded in selling globalization to a large degree, NAFTA, etc. even though it's completely obvious what the effects are. Another serious problem is the Military; which delights in burning through truck loads of dollars; reining them in, would once again, result in assasination. Very difficult situation. I'm sure the ruling class is delighted that they people getting distracted by crooked bankers; an issue that is largely irrelevant.

Panafrican Funktron Robot's picture

The Trans Pacific Partnership being a terrific recent example of what you are describing here.  I disagree on your assessment of banking though, they are pretty clearly the nexus in all this.  

Race Car Driver's picture

> ... they are pretty clearly the nexus in all this.

Who forced Nixon to go set us up to sell us out to the ChiComs, I wonder?

MiltonFriedmansNightmare's picture

Who forced Nixon.....Could that have been David Rockefeller, the Antichrist himself? He who called Mao, the murderous bastard who was responsible for the deaths of 80 million innocent Chinese, the leader of the greatest and most successful social experiment the world had ever seen. Could it have been that SOB?

Lost Word's picture

Especially when considering that the Banksters own all the major corporations.

czardas's picture

You are assigning blame to everyone except the responsible party - the American consumer.   They gladly traded cheap(er) products for jobs since (it's all tied together) debt allows us to buy all the crap we don't need.  In the overall picture, manufacturing has been "Democratizing" for decades.  It was unnatural for the US with 5% of the population to produce 25% of the world's goods.  Poorer nations expanded on the back of our R&D.   3-d printing will be even a larger disruption to manufacturing than moving businesses to China.  Many posters insist on a closed-door policy - buying, building and using only our own products - but the cat is out of the bag.  Folks will NEVER pay $50 for a US shirt when they can get a Chinese one for $15.

Oldwood's picture

Amen. the human blight of NEVER turning away from a good deal. Corporations did not force us to buy crap from China. They made it very easy and we have been addicted to marketing for years, so it's not a big stretch to lay blame on them, but ultimately we did it. There was no gun to our head, we chose freely if not wisely. All of these "investors" that post here are incredulous at the corruption and malfeasance in the financial markets, yet they play on, acting as thought they are the victim when shit goes sideways. They are enabling the manipulation and theft we see daily. They are placing the money into the hands of those very people we know are manipulating an ultimate collapse.

There would have been no financial collapse in 08/09 if people were not in debt way over their fucking heads, but it was those damn brokers and agents that "tricked" them into the deal. Personal responsibility would go a long way towards fixing this but that won't happen for the same reason we are here today. They don't want the truth, they don't want the consequences of their choices. There are people lined up to lie to them, to tell them exactly what they want to hear...that its somebody else's fault. They were duped, they were robbed, and when they discover that their freedoms and liberties are gone as well, they will be making the same claims, blaming the same people, anyone but themselves.

The Burning Planet's picture

Go to many towns in America and try to buy a pack of batteries, or have some photos developed. You'll find you have many choices, as long as they're all CVS or Wal*Mart. So please don't Stockholm Syndrome on the corporate Leviathan. "IT" is the problem. Or at least a major part of the problem.

MiltonFriedmansNightmare's picture

Who forced Ross Perot out of the 92 Presidential campaign just as it became clear that he had a shot at winning? You may want to lay some blame on that guy/s.

The Burning Planet's picture

"You are assigning blame to everyone except the responsible party - the American consumer."


That's like blaming a tourist for being kidnapped.

DOT's picture

We were not kidnapped; it was seduction and ignorance. And laziness, got to remember that, why go to work when you make more sittin' on your ass?

jomama's picture


Even Reagan-- the greatest President of the 20th century-- has to shoulder some of the blame.

oh, you mean this guy?

you can't be even remotely serious.  try JFK.  you know, the one who actually tried to stand up to the crime syndicate and got his brains blown out for it? 

jomama's picture

the hell is 'fair' about that?  it's just the current sitting puppet of the time.  is that supposed to mean something?

Future Jim's picture

So you agree that Clinton did nothing and deserves no credit for a good economy, and that the media created the Myth of Clintonomics?

Media bias is the real story.

czardas's picture

Future, I've learned that some posters hate everyone - the Founders, every president, Congressmen, bankers, teachers, journalists, media - the list goes on.  I'd like to know someone they DO like.  LOL

czardas's picture

There are jobs!!  The problem is our national priority is screwed up.  Business is literally begging for engineers, scientists, analysts, technically-trained personnel, folks with skills.  Business would much rather hire a US engineer than spend the time and effort andncost of hiring foreign workers.  This is not a case of China taking our jobs - any of which we could do but at a higher price.  It's a case of gross national incompetence - emphasizing the public sector and degrees in art, law, business, communications, law enforcement, and music.  If half as much effort had been expended toward promoting  jobs of the future as went for gender equality in colleges (where women are nearly 2/3 of all students) we'd be better educated with better jobs.  If you're concerned about a job for your child, emphasize those areas that folks need.  

caustixoid's picture

Absolutely true.  Who coulda know'd?  Well James Goldsmith did in 1994  - see if he doesn't predict the world we have today.  And check out how Charlie Rose and the clintonite mock him as a ridiculous man:

A Prophetic Interview with James Goldsmith

MisterMousePotato's picture

So did the beat poet, Charles Bukowski:

Dinosauria, We

Born like this
Into this
As the chalk faces smile
As Mrs. Death laughs
As the elevators break
As political landscapes dissolve
As the supermarket bag boy holds a college degree
As the oily fish spit out their oily prey
As the sun is masked
We are
Born like this
Into this
Into these carefully mad wars
Into the sight of broken factory windows of emptiness
Into bars where people no longer speak to each other
Into fist fights that end as shootings and knifings
Born into this
Into hospitals which are so expensive that it's cheaper to die
Into lawyers who charge so much it's cheaper to plead guilty
Into a country where the jails are full and the madhouses closed
Into a place where the masses elevate fools into rich heroes
Born into this
Walking and living through this
Dying because of this
Muted because of this
Because of this
Fooled by this
Used by this
Pissed on by this
Made crazy and sick by this
Made violent
Made inhuman
By this
The heart is blackened
The fingers reach for the throat
The gun
The knife
The bomb
The fingers reach toward an unresponsive god
The fingers reach for the bottle
The pill
The powder
We are born into this sorrowful deadliness
We are born into a government 60 years in debt
That soon will be unable to even pay the interest on that debt
And the banks will burn
Money will be useless
There will be open and unpunished murder in the streets
It will be guns and roving mobs
Land will be useless
Food will become a diminishing return
Nuclear power will be taken over by the many
Explosions will continually shake the earth
Radiated robot men will stalk each other
The rich and the chosen will watch from space platforms
Dante's Inferno will be made to look like a children's playground
The sun will not be seen and it will always be night
Trees will die
All vegetation will die
Radiated men will eat the flesh of radiated men
The sea will be poisoned
The lakes and rivers will vanish
Rain will be the new gold
The rotting bodies of men and animals will stink in the dark wind
The last few survivors will be overtaken by new and hideous diseases
And the space platforms will be destroyed by attrition
The petering out of supplies
The natural effect of general decay
And there will be the most beautiful silence never heard
Born out of that.
The sun still hidden there
Awaiting the next chapter.

disabledvet's picture

just don't take my drivers license away. "give me gasoline at ten cents a gallon and I can do anything!" Generals, CEO's, Romans!...I can make this happen for you...but for the price of fuel!

disabledvet's picture

just don't take my drivers license away. "give me gasoline at ten cents a gallon and I can do anything!" Generals, CEO's, Romans!...I can make this happen for you...but for the price of fuel!

Future Jim's picture

"Perverse incentives yield perverse results."


Pervese incentives are What is Wrong with the People.

czardas's picture

The difference is job type.  Until very recently, all jobs were driven by muscle. If you could fight, lift, pull, carry or (later) move a handle, work the loom, swing a hammer, etc that was sufficient. It was impossible to eliminate these tasks  - builders, herders, pickers, planters, seamstresses, scribes and later assembly lines.  No better proof can be found than the new "factories" with 12 (vs thousands) of emplyees.  We CAN create jobs but only those that require education, skill or experience will last.

SAT 800's picture

The difference is not job type. the difference is industry here, or subsidize the Chinese.

czardas's picture

I have a feeling you didn't read beyond the first sentence.

SAT 800's picture

We cannot create jobs. No. We cannot. Because we persist, at the behest of the ruling class, in buying foreign manufacture. The World Trade Center has been much studied; where did the steel come from? Japan. All of it; already cut to size and marked as to where it went in the blueprints. What do you call a nation that buys its produced, final product steel from another nation? A failure. This failure, however, is not necessary, it was and is engineered.

czardas's picture

Why in the world would the "ruling class" care where we bought our manufactured products?   Sorry, I can't see those folks wasting their times making plans to force us to buy this or that product. Steel came from Japan because the Japanese workers agreed to take a mulit-year wage cut while the largest (at the time) steel plant in the world was being built.  Would American steel workers have done that?   The new WTC is getting its steel from Germany and bomb-resistant glass from China not because the "ruling class" mandated it but because that's where the product is. 

It depends on what folks are wiling to pay.  I prefer the quality of Italian clothing even though it's expensive.   But I also get Chinese crap from Walmart for working around the farm.  The best example of our plight was a "Buy US" rally I attended.  The little American flags we pinned to our shirts said "Made in Taiwan".  LOL

disabledvet's picture

the Ice Man cometh. And yes...Charlie Rose really is a raging psychopath. "Now here comes your 1999 redux."

BeansMcGreens's picture

This is absolutely true, as it is not the education level but the amount of employed skilled workers needed to keep the machines for manufacturing going. Everyone from the truck driver and rail brakemen to deliver and move materials to the machinist to build the product to the commissioned salesmen to sell it are all necessary. When the textile mills left the rural areas of NC, so went the skilled mechanics and small machine shops. And like a row of dominos went all the rest.

Chump's picture

"No better proof can be found than the new 'factories' with 12 (vs thousands) of emplyees."

Then you have no substantial proof.  Who designed and built those factories?  Who maintains them?  Who designed and built the machines used to design and build those factories?  Who maintains those machines?  Who designed and built the factories where the machines that built the factories in question were built?  Who maintains them?  And so on and so forth until you modern-day Luddites get dizzy and fall over.

czardas's picture

If the purpose of the conversation was repeating slogans regardless of evidence I'd agree.  But the subject was employment and when 12 folks work in a factory instead of a thousand this says a lot.  I can't figure out what jobs folks think are going to be created. It's not like there are none to be found.  Business is begging for technically trained workers - engineers, IT, chemists, nano, etc and are forced to go overseas because we emphasize business and communication instead of engineering and artificial intelligence.

The "proof" is everywhere - in factories from Mitsubishi to Fiat to window manufacturers (Omaha),  food manufacturing.  The Hershey's Chocolate plant was spectacular (I visited), components by Axiomtek, a company devote to factory automation as is Intelligrated who designs buildings and materials and is automating its factory. Groupo Modelo's brewery in North Mexico (largest in NA) is nearly fully automated. BMW, IKEA, Hyundai...some have no lights or heat (talk about money savings).  Factory automation is now a subset of Industrial Automation.  The point is I didn't simply make up something but wanted to share what is going on in the real world. 

Chump's picture

I appreciate that you wanted to share something.  My point is that automation does not necessarily reduce net employment.  If 12 people work in a factory instead of thousands what, exactly, does it say?  Just because you can't figure out what jobs are being created in that process does not mean there are, in fact, no jobs being created.  By my reasoning someone is building the components of that factory, or someone is building the machines that build those components.  Someone is inspecting and servicing all of the above.  Someone is operating the machinery that digs the factory's foundation, and someone is building that heavy machinery.  Others are surveying/staking the factory while still others are designing the building itself.

I do agree that America's (relatively) newfound emphasis on useless degrees is crippling an entire generation.  I can find a lot of common ground with you there.  On the subject of automation I think you're way off the mark. 

Yukajub's picture

"Someone is building... someone is operating..." Not necessarily, could be something, not someone. Automated industries build parts and provide service for other automated industries. Machines are not used because they are a great way to create more work up or down the line. 

disabledvet's picture

it cannot be done without a ready source of liquidity. now that we have no gold that I am aware of the strengthening dollar and the disinflation that results from it will truly put the "squeeze" on the value of liquidity period. Goldman/Sachs has now gone ""back to all in" on monetizing debt in order to deploy solar cities...starting in Los Angeles...and should it work there "the world." But this is not providing liquidity but a "theoretical economic construct that creates cash flow" and IN THEORY allows the State (of California) to "pay for things." This will not be Morgan Stanley. They deal in debt markets...and therefore it's all about repayment risk...currencies, the dollar, gold. if you want them to fund something...say a country for example...they will need cash flow, discounted, in dollars.

TBT or not TBT's picture

WW I was helpful employing surplus men at home and in the trenches. There were a lot of them around, arguably due to disruptive technologies clashing with family sizes still at levels appropriate to previous millennia of manual labor intensive food production and non existent social security systems.

MeBizarro's picture

One of the single dumbest comments I have ever seen on this thread.  Figures it gets 42 thumbs up  

You statement is akin to saying - "yeah there is no object really visible in the day time except the sun."  Go look at the historical evolution of agricultural and how many people it took to produce a certain amount of wheat per some standard unit of measurement.   It is staggering.

This assumes that Schumpter's work on creative destruction is going to remain valid despite additional technological progress or other trends and even though it is has a really short life span in terms of civilization.  This is why most economic work sucks today.  It is way too siloed and compartmentalized and takes things that have been only in effect for maybe 50-100 years in modern economies and assumes they are 'laws' akin to laws in physicial science.

disabledvet's picture

you CANNOT financialized it. this is what cause the collapse of Rome. They were producing wheat on an unimaginable scale at the time...but it was in the cargos of the Greek Trading ships that the "futures markets" were born...with paper monies (in the form of a system of weights and measures and math) the result. They continued to debase...until no one got paid and the wars could not be "won" because the Army could not be raised. next came the looting and finally total collapse. does the world cry out "where are the Americans?" if so I don't hear it.