Chart Of The Day: Labor Force (Lack Of) Participation Or "We'll Just Make It Up As We Go Along"

Tyler Durden's picture

By now the widely accepted groupthink on the collapsing labor force participation rate, which as we noted last Friday, cratered to a fresh 35 year low of 62.8% which was the main reason for the collapse in the unemployment rate to 6.7% from 7.3% two months ago, is that it was perfectly expected and is largely due to demographics. Sadly this is just another example of goalseeking a real-time variable to "fit" with a narrative of a recovery when in reality there is no recovery for the record 91.8 million Americans who have given up on work entirely and are now out of the labor force.  All of this is well-known. What may not be as well known is that every two years the BLS releases medium-term (10-year) projections for the participation rate. The projections include the demographic composition of the population and the LFP rates of different  demographic groups, among other statistics. And it is here that we see just how "made up" the narrative surrounding the demographic mea culpa truly is.

Presenting exhibit A: "Labor force projections to 2012: the graying of the U.S. workforce", released by BLS' Mitra Toossi in February 2004. Jumping to the punchline, here is what the BLS expected a decade ago:

  • Total Civilian Labor Force forecast in 2012: 162,269
  • Total civilian non-institutional population: 241,604

Or, a predicted labor force participation rate of 67.2%, or notably higher than the 66.0% as of the report's publication in February 2004.

Where are we now?

  • Total Civilian Labor Force at December 2012: 155,485, just under 7 million less than was expected (and this with the so-called recovery)
  • Total Civilian non-institutional population at December 2012: 244,350, or 3 million more than expected.

Net: a 10 million worker delta! Does this mean that, gasp, America's demographic crunch and "Baby Boomers are retiring" meme were unknown just ten short years ago? Apparently yes. Because somehow the 67.2% expected LFP at the end of 2012 ended up being 63.6% and sliding. And the punchline - if one were to use the expected 67.2% LFP rate, today's unemployment rate would be higher than 12%!

Because here is what happened next in subsequent BLS labor force participation forecasts:

In a nutshell: lower, lower, lower as the LFP entirely not in line with forecasts, cratered. But hey, what they know now, namely that Americans can't wait to retire because they have so many 0% yielding savings, they didn't know back then.

And there you have it: when it comes to the Labor Force Participation rate, one can best summarize it by the old maxim: "We'll just make it up as we go along."

Source, ironically, St. Louis Fed: A Closer Look at the Decline in the Labor Force Participation Rate

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Max Damage's picture

Does posting on here count as labour participation? ? Could add a few to the numbers if they use it?

ptoemmes's picture

Hmmm...what we need a a goverment program that pays us - well me to heck with the rest of you ;-) - to post on ZH.  

Headbanger's picture

Even those dismal projections will prove to be way too optimistic when this house of glass cards crashes down.

Then again, we may well see an 80% labor participation rate when anybody left must farm and hunt for their own food.

resurger's picture

I will send drones and robots to hunt for my food... it would be dangerous to venture at that time.

Haywood Jablowme's picture

Participation rate or not, I'm just glad my monopoly $$ is going towards the purchase of high-grade penis-pumps.

I'm sorry, I meant VES aka vacuum erection systems....

Can anyone confirm if these are made in China or the good ole' USSofA?  I'll be damned if those slant-eyes get another cent of my slave wages.



boogerbently's picture

Here's how bad (obvious) it' has gotten.

The financial bobbing heads at MSNBC were just discussing that the govt unemployment numbers were not credible !

Emergency Ward's picture

The only ones on the Govt payroll are the down-arrow trolls...

<<<<< see?  Now where's my check?!?

DOT's picture

Your check has been converted into a special note which is now ensconsed within a Lockbox.

boogerbently's picture

The new BLS parameters for next months unemployment numbers only count people who are currently employed.

boogerbently's picture

The new BLS parameters for next months unemployment numbers only count people who are currently employed.

boogerbently's picture

The new BLS parameters for next months unemployment numbers only count people who are currently employed.

ebworthen's picture

Oh shit, don't say that!

Must...sign...up...EBT...S.S. Disability...

Dr. Engali's picture

That depends. Are you a NSA troll?

XAU XAG's picture

Seems like everything now days is

"We'll Just Make It Up As We Go Along"


Having woken up in 2008 thier are so many .............still ASLEEP AT THE WHEEL!


Cocomaan's picture

Excellent analysis. Heard some moron on NPR talking about this demographic change, so it's good to see those soothsayers at the BLS being forced to take their own medicine. 

TeamDepends's picture

Real US unemployment is closer to 30% than 12%.

BLOTTO's picture

Work ruins your life in this day and age.

7am getting ready for work

12pm at work

5pm leaving work

7pm recovering from work

12am thinking about work...

=Good times.



TD    You may be right on that one, at least double from 12%.

Zero Debt's picture

Correct. SGS Alternate Unemployment is nearing 25% for the US.

The statistical fudging since 2009 is absolutely breathtaking. They are eliminating millions from the workforce with a stroke of a key. The official statistics are so full of lies that it is impossible to use them for economic forecasting or analysis.

The same goes for the inflation data.

Shizzmoney's picture

I didn't know that you could, "move the goalposts" in data in "free" societies?

Gunga's picture

That's some good shit you got there. :)

Oldwood's picture

When everything is free, numbers really don't matter anymore.

lizzy36's picture

So the BLS went to the Federal Reserve school of we "can't forecast good"?

Vice's picture

When will they include robot burger flipping robots in this stat? Surefire way to "fix it"

resurger's picture

Print those fucking Jobs Yellen.

Emergency Ward's picture

Which weighs more, a pound of dollar FRNs or a pound of direct-deposit dollars?

ebworthen's picture

Future updates:  cardboard to be considered housing and food.


EB      +1    Good laugh to start off the day........but do we get condiments with that cardboard or would that be considered a vegetable?

ebworthen's picture

Free mustard and ketchup packets at your nearest McD's, ketchup = fruit, mustard = hope.

grunion's picture

I am cold and wet because I got hungry and ate my house. The notion is so surreal it will probably come to pass in this runaway train of a world where nothing surprises any longer.

KnightTakesKing's picture

Yes, BLS will say that a large cardboard box is a reasonable substitution for standard, unaffordable housing. Shanty Town coming to a neighborhood near you...

DOT's picture

Apple will bring the new i-cardboard to market at any momment ! This will bring a good sized adjustment to our inflation adjustment which then allows moar adjustments.

Professorlocknload's picture

HHS will tout it as well. Lotta fiber in there.

Oldwood's picture

Many would be surprised to know how much of their home is already cardboard.

tokengator's picture

"To the extent that the decline for the  youngest group is due to the time spent at school, it is possible that these workers will  show a higher labor force attachment once they are out of school"



lmao @ this conclusion in the fed link


ebworthen's picture

More student loans!  STAT!

And if they can't get a job after the B.S., just enroll in an M.S. program!

tokengator's picture

No employers are impressed with your 1780's Womens literature degree? Well then you need an M.S. in 1780's Womens literature!!!

Spungo's picture

The government's battle against child (and adult) labor appears to be working.

TheRideNeverEnds's picture

don't worry, we will just make up for it with volume.

youngman's picture

I dont think they will go back and look at this....why try to learn when your paychecks keep coming .....

OutLookingIn's picture

Calculate the numbers the "old" way.

Real unemployment is north of 20%. Recovery? Not so much.

Dr. Engali's picture

It might have been a good idea to keep a couple of factories know...just in case.

ncdirtdigger's picture

We (tree huggers) don't want those dirty things in our back yard.


The IMF is sending out their minions to talk up a "Global Citizen Dividend". Translation: Welfare for everybody!   I don't trust it one bit.

grunion's picture

Forgive my innocence, but just exactly how does one pull that off...Successfully.

Professorlocknload's picture

They don't pull it off in one shot. They are doing it one special interest faction at a time, until the few remaining demand it. Follow the purchased votes. 

Oldwood's picture

Is that like a stupidity "bonus" or something?

Zymurguy's picture

The ultimate goal here is to make the citizens of developed countries to mis-trust everything.  We are to lose faith in our currency, lose faith in banks, lose faith in our elected representatives, lose faith in our form of govt., lose faith in getting a job, lose faith in education, lose faith in morals, lose faith in family, etc. etc. etc. - the moment they determine we don't have enough trust... that's when they step in to crash all these systems in order to usher in a new form of govt. and control over all aspects of life.

Dr. Engali's picture

Bingo. That's the ultimate objective. If they wanted to restore any faith at all they would start with a few perp walks. What we got instead was the outright criminal activity by the bankers and our "elected" officials. The fact that there is no accountability for anybody besides the ordinary citizen is a sure sign that they don't give a fuck what we think. They are going to loot the system until it crumbles, and once it does we will find ourselves under the thumb of a one world police state.