Labor Participation Rate Drops To Lowest Since 1978; People Not In Labor Force Rise To Record 92.3 Million

It is almost as if the Fed warned us this would happen. In a note released yesterday, a Fed working paper titled "Labor Force Participation: Recent Developments and Future Prospects", looked at the US labor force and concluded that "while we see some of the current low level of the participation rate as indicative of labor market slack, we do not expect the participation rate to show a substantial increase from current levels as labor market conditions continue to improve." But don't blame it on the greatest recession/depression since 1929: "our overall assessment is that much - but not all - of the decline in the labor force participation rate since 2007 is structural in nature."

Well that's very odd, because it was only two months ago that the Census wrote the following: "Many older workers managed to stay employed during the recession; in fact, the population in age groups 65 and over were the only ones not to see a decline in the employment share from 2005 to 2010 (Figure 3-25)... Remaining employed and delaying retirement was one way of lessening the impact of the stock market decline and subsequent loss in retirement savings."

So yeah... sounds like most of the decline in the participation rate is not structural in nature and is merely a response to what everyone but the 1% sees as the biggest - and ongoing - economic devastation perhaps in history, papered over conveniently for the 1% with trillions in liquidity injections.

In any event, no matter how you spin it, today's data was bad: because not only did the headline data disappoint, the labor force participation rate dropped once again to 62.8% from 62.9%, matching the lowest since 1978, as a result of the people not in labor force rising once again, and hitting a new all time high record of 92,269,000, up 268,000 from the prior month. In fact, in August the number of people not in the labor force increased by nearly double the number of people who found jobs, which as we reported previously, was only 142K.

Putting it another way, since the start of the depression in December 2007, the number of people not in the labor force has increased by 13.0 million. The number of jobs added: 768,000.

Comments

[Yen Cross]

    We need to start another employment metric so the dolt Wall Street analysts look like even bigger fools.

    We can call it the "FSA particpation rate". (Free Shit Army participation rate)

    It can have a sub-index called the "Militia Participation Rate" (MPR)

[Last of the Mid...]

Tribe election, that's probably the most honest term I've heard in a while for what's going on.

[mattgallis]

Always baffles me that ~30% of my age group doesn't work.  What the hell do they do all day?!

[Ewtman]

Real unemployment is over 23% - these bogus numbers can't be fooling anybody.. still the stock market goes up?

http://www.globaldeflationnews.com/employment-participation-rate-plunges...

[GCT]

I remember over two years ago when people were scoffed and demonized for predicting where this was headed on this very site.  I learn here every day.  This country will indeed be mostly dependent people waiting on a hand out from the government.  Currently there are more people on welfare and gov. handouts then working and when the states get done with the so-called living wage bullshit many more will be on the government teat.  We own a bakery and right now are just barely holding on dispite being the top rated bakery in Arkansas. 

Salute to Zero hedge and all those commenters that had some fore sight.  I come here to read when I can but right now I am working 12 hour shifts 6 days a week at the bakery to keep it afloat!  I took home 1200 bucks last month.  The people working for us are like family and I am doing my damndest to keep them and help them.  They all make alot more then minimum wage except the part time girls working the counter while they attend college.  Even my part timers make a buck more then the minimum wage. 

We get no gov help nor do we accept EBT as bakeries cannot get a USDA license.  It is scary and at the same time sad to see all the lies people believe. The gov is afraid of their own citizens now as someday this parade will come to an end.

[Its_the_economy...]

I fully expect moonshine to make a major comeback.