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September Jobs: Some Numbers Bubblevision Didn’t Mention
Submitted by David Stockman of ContraCorner
September Jobs: Some Numbers Bubblevision Didn’t Mention
The September establishment survey showed a 248k job gain, but that was the seasonally maladjusted, preliminarily guesstimated version which will be revised in October and November, and then re-benchmarked several more times in the coming years. So let’s take a pass on the enthusiasm with respect to this fleeting monthly delta and consider a couple of trend points evident in this morning’s release—-data points which aren’t going to get revised away and which actually provide some fundamental insight about the actual “employment situation” and the true condition of the US economy.
My favorite number is right at the top of the BLS table and it’s 155.9 million. That is the civilian labor force number for September and it compares to 154.9 million reported for October 2008 way back when the financial crisis was just erupting. The reason that rather tepid gain of 1 million labor force participants over the course of six years is important is that during the same period the working age civilian population (over 16 years) rose from 234.6 million to 248.4 million—-or by 14 million in round terms.
That’s right, the labor force grew by only 7% of the gain in adult population. That explains, of course, why the labor force participation rate of 66.0% back at the time of the crisis has plunged to a 36-year low of 62.7% in September. Or to put it another way, the employment-to-population ratio of 59.0% last month compared to just under 62% six years ago and 64.2% in the year 2000.
Needless to say, that huge 500 basis point decline in the true jobs ratio is dramatically more important than the monthly jobs delta—even if the later did trigger a run-the-stops burst by the robo traders within seconds of the release. The fact is, the plummeting rate of employment among the adult population means that the effective rate of taxation on labor hours worked has risen sharply, and will continue to do so as the baby boom ages.
So you don’t have to be a raving supply-sider to realize that a rising tax rate on labor—expressed as either current taxes or future debt service— as far as the eye can see is not a formula for the kind of perpetual earnings growth that is being capitalized by today’s bubblicious stock markets; and that’s especially true in a world crawling with cheap workers and massive excess production capacity stimulated by 14 years of financial repression and ultra-cheap capital by the world’s central banks.
Indeed, the single most important number in today’s report is 102 million, which is the rounded sum of adults either not in the labor force or unemployed, and it amounts to 41% of the adult population. Stated differently, that’s the number of adults who do not contribute to current production and must be supported either by family breadwinners or the state—-and nowadays especially the latter.
Indeed, when these trends for prime age workers (25-54 years) are viewed, the case is even more compelling. The employment ratio for that group is at 1982 levels——a ratio that prevailed when the female labor force participation rate was still climbing strongly. On a sex-adjusted basis, the prime age employment ratio has never been as low as it has remained since the end of the Great Recession.
Among other things, these dismal employment ratio numbers tells you why the Wall Street patter about PE multiples being at or below historical norms is so wrong-headed. The capitalization rate for the American economy should be falling because the dependency burden faced by workers and entrepreneurs is soaring at rates never before witnessed. Going back to September 2000, for example, there were only 76 million adults not in the labor force or unemployed, and that represented just 35.8% of the adult population of 213 million.
This means there has been a 26 million gain in the number of adults not working—-even part-time—during that 14 year period. About 10 million of that gain is accounted for by retired workers on social security—-a figure which has risen from 28.5 million to 38.5 million during the interim. But where are the other 16 million? The answer is on disability (+4.5 million), food stamps (+25 million), survivors and dependents benefits, other forms of public aid, living in parents’ basements on student loans or not, or on the streets.
There should be no mistake about the implications of these baleful trends as once again reinforced in today’s “jobs Friday” report. They do not represent merely a social problem or the fact that Washington’s fiscal calamity is going to get steadily worse in the years ahead. They also embody an endemic economic problem and staggering challenge to the Keynesian money printing regime now incumbent in Washington.
In the first place, the massive monetary experiment since 2000—which has seen the Fed’s balance sheet grow from $500 billion to $4.5 trillion or by 9X—-has not caused macro-economic performance to improve. The employment ratio has plunged; full-time breadwinner jobs have actually shrunk; total labor hours employed have been stagnant; real GDP has grown at only 1.8% annually for 14 years—compared to 4% annually between 1956 and 1970; and real net capital investment is 20% below its turn of the century level.
Breadwinner Economy Jobs- Click to enlarge
So what is really embodied in today’s report is more evidence that America’s dependency ratio is still rising and that the already crushing burden of the welfare state will weigh ever more heavily on an economy that is visibly failing as measured by any of the fundamental trends of performance. Indeed, it is well to recall that even today—after what the clueless occupant of the White House claims as 10 million new jobs when 90% of that number, in fact, represents “born again” jobs relative to the 2007 peak—-there are 110 million Americans living in households receiving means-tested benefits and 158 million in households that receive transfer payments of all types.
Yet as the burden of taxation and public debt resulting from these trends weigh ever more heavily, it leaves the mad money printers resident in the Eccles Building stranded in an impossible corner.
Unless they wish to destroy the monetary system and keep money market rates at zero forever, they will have to normalize interest rates. And rising interest rates—eventually 300-400 basis points at minimum— on top of rising taxes do not amount to a formula for booming growth. Or even any meaningful economic growth at all.
In that context, capitalizing S&P earnings at 20X reported profits on the eve of the coming storm is a fool’s errand. And you can look it up. What really counts for growth and stock market value beyond the day trader’s horizon is all right there in the September jobs report—-even if they didn’t mention it on bubblevision.
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What I want to see is the graph over the past 25 years showing the number of people in the USA with assets over $100 million versus the labor participation rate. As concentrations of wealth at the top increase, the overtaxed middle class dwindles.
It's about the 100% you stupid fuck
Says who?
On top of that, 100% of what, or of whom?
As P.T. Barnam once said, "There's a sucker born every minute."
Obviously, if there are two kinds of people, suckers and people who don't suck, clearly there is at least a 50/50% divide...
No mention of the Good Pay Jobs lost, that may never be replaced.
Layoff List:
http://www.dailyjobcuts.com
No mention of the Good Pay Jobs lost
Well thanks for that Debbie Downer.
Someone didn't get the reference.
At least 4......and counting.
It's OK.....I don't mind taking one for the team.
"Unless they wish to destroy the monetary system and keep money market rates at zero forever, they will have to normalize interest rates"
Sorry Bro, the monetary system is already destroyed. Even a tiny rise in rates ends the game for the .01%.
So this will continue until it can't... and that's all you need to know.
For the latest breaking news: www.ibreezeit.com
compassion, justice, mercy, equity... take 1 full time good paying job w benefits and turn it into 3 part time, minimum wage crap job. That works for the 1%.
Truth must be scrupulously massaged in a fascist, police state. Here are the 25 most censored stories in the land of the free in 2104:
6. The Deep State: Government “without Reference to the Consent of the Governed”October 1, 2014
It is no secret that concerned citizens are condemning the United States government’s lack of transparency, accountability, and honest constituent representation. Reporting for Moyers & Company, Mike Lofgren, a congressional staff member for twenty-eight years specializing in national security, addressed the issue of the “deep state” that undemocratically orchestrates unchecked private agendas, while corporate media distract the public’s attention by focusing on traditional Washington partisan politics. Lofgren contended that, although the deep state is “neither omniscient nor invincible,” it is a “relentlessly well entrenched,” “hybrid association of elements of government and parts of top-level finance and industry that is effectively able to govern the United States without reference to the consent of the governed.”
Exploiting the world’s resources and governments with criminal impunity, a wealthy elite—sporting an estimated $32 trillion in tax-exempt offshore havens—are the deep dark secret of plutocratic imperialism, operating behind more visible, privately controlled government representatives. Rep. Spencer Bachus (R-AL), the House Financial Services Committee incoming chairman in 2010, openly flouted constitutional rights when he stated, “My view is that Washington and the regulators are there to serve the banks.”
5. Bankers Back on Wall Street Despite Major Crimes
2. Top Ten US Aid Recipients All Practice Torturehttp://www.projectcensored.org/category/top-25-censored-stories-of-2014/
Did somebody censor the other 22 stories?
Of course anyone with an IQ greater than their shoe size knows that the gubmint jobs numbers are complete fantasy bullshit. They "hit" any number they like or need to. We are surrounded by millions of mouth breathing, snot bubble blowing, booger eating morons that get to vote. Since they live off the labor of others they vote just like you would expect the free shit army to vote. Ain't no fixing this already ready doomed socialist system. It will eventually break all the way down, then it can be rebuilt.
Why? Because big gubmint voters are smart!
Because big gubmint voters are smart!
Don't leave out special and entitled.....although apparently not very good at math.
If I had a Shovel, I’d be Ready.
There is a myth in America that people or a group of people can vote away the inalieanble rights of their fellow man. This is the big lie that is killing freedom and not so much that there are people who perpetrate it but rather that there are too many willing to accept it.
It's not a lie if it happens and no one stops them.
Maybe they shouldn't do it, but they can and they are.
We need more articles from the Goldman/FED's software application programmers and cut back on the old school data.articles. It is a good article but doesn't have much to do with the way markets or investments work.
"It is a good article but doesn't have much to do with the way markets or investments work."
The way the market has been working, has in hindsight, been simple.
BTFD. BTFATH. Apparently it has been so simple, even a cave man could do it.
September Jobs: Amazing Record Month…for Immigrants Displacing Americans
October 3, 2014
I see more and more of these illegals in Wawa every morning when getting my cup of Java before going off to work. Illegals are back to taking the landscaping and construction jobs. I doubt any of those in WAWA are heading out to the local farms to pick lettuce. lol! Oh and you can spot the illegals a mile away if you have good ears. They all speak spanish. No need to learn English when they get all the benefits that go to just being here illegally.
The .01% needs the illegals and since they own the country the illegals will stay, period.
The illegals have it way better here, and could potentially provide a reliably dependent, unquestioning (that's key) voting block first for the Ds and then for the Rs, as they play both ends of the single Party. That's why the Party will push more or less for their legalization, as they can nicely block efforts to question and displace their power - despite their major criminality. Nice, huh?
"September Jobs: Some Numbers Bubblevision Didn’t Mention"
I was watching the local TV news and the anchor glowingly announced the 5.9% rate, but made no mention of the new record 92.6 million not working.
Another thing that wasn't mentioned on the same channel, was the doctor who boarded a plane in a hazmat suit, as reported on Zero Hedge.
"The September establishment survey showed a 248k job gain" -- Direct to you from the "Ministry of Truth" - 1984
Christmas season hiring starts shortly. I was in Wallmart yesterday and their already putting out the Christmas decorations. Thus we can expect an even larger number next month but then we know the majority of the jobs being created are part time. Thus we saw a decrease in hourly wages this month. I fully agree with Zero Hedge and the fact that Millions more folks are now on disability benefits. Remember that 60 Minutes show where they did a report on a shady lawyer that had his own doctor signing off folks to disability from his mobile home office. Obama wants millions of Americans dependant on the government. Its how He got reelected and how he hopes to keep a Democrat in the White house for a long time to come.
"Obama wants millions of Americans dependant on the government. Its how He got reelected and how he hopes to keep a Democrat in the White house for a long time to come."
Last presidential election, i left the choice for President, blank. Had the republicans put up a worthwhile candidate, he could have won.
NEVER leave a race blank. It is way too easy for anybody downstream of your polling place to fill in THEIR choice on your ballot. Solution is to mark the write in space and write in Mickey Mouse or some other name.
The long-term implications of poor job creation are massive. The biggest may be that a huge number of people are dropping from the work force. Often these people have little in the way of savings, this means that the burden of caring for them will be transferred to society. If to many people shift into this category we will slowly wear down through attrition.
Finding a fair way to share and balance the work load that goes on every day may be one of the most important problems facing our modern world. Not discovering a solution to this dilemma bodes poorly for our consumer driven economy and adds to the toxic problem of inequality. More on the implications of unemployment in the article below.
http://brucewilds.blogspot.com/2013/09/implications-of-poor-job-creation...
"The long-term implications of poor job creation are massive."
We are at the tail end of a long term cycle. We have yet to hit the bottom of it, thus the worst is yet to come.
A record 92.6 million are not working. Add in the officially unemployed and the number comes to 102 million according to David Stockman's latest commentary.
To those who have paid attention, it is blatantly obvious that nothing has been fixed. Sub prime housing has been moved to sub prime auto. It is another disaster waiting to happen. The dangerous banks- the too big to fail, have grown by 37%, which is another disaster waiting to happen. Citi has 59 trillion in derivatives and JP Morgan has 67 trillion. The bankers are pushing the U.S. government to prevent derivatives from being regulated, in a pending trade deal with Europe. Another disaster waiting to happen.
Another Great Depression is waiting in the wings.
The undertone in this as in many other useful contributions from investment company sources is the undertone that it is somehow the dependents' fault or that cutting out the unsustainable payments will help anything. Am I reading this wrong? Maybe I'm just oversensitized from half a century of listening to this meme?
The problem is jobs. JOBS. And the solution is in those trillions of dollars sloshing around out there in bubble-land, and their owners who cant or won't invest in the real economy because that's not where the profits are.
"The problem is jobs. JOBS"
Jobs are a symptom of the problem, not the problem itself.
"The problem is jobs. JOBS"
That's apparently what the Obama Administration believes. Consequently the escalation of The War on Jobs...
So all those folks punching their ticket in this economy are
also spending everything they make too. With the soaring dollar this is great news for retailers as folks keep spending money that was never their's to begin with.
The problem is not with the transfer payment mechanism which has held up almost to perfection here but in the amount of debt the Government is now struggling to service. Simply put when you're spending a billion dollars on a single destroyer for the Navy it's the Government (and ultimately the Navy) that has the problem.
After finishing up the Krugman's argument about a liquidity trap the fact that he can't explain the stock market, the soaring dollar or crashing commodoity prices really does make me wonder about his grasp of reality going on many years now.
The Government is not a bankrupt institution but a BANKRUPTING institution. "Enter the Ebola."
That could wipe out some very expensive healthcare....easily the biggest item in the Federal Budget...saving the Federal Government trillions I imagine. (Note to CNBC: Wall Street isn't the only one playing a numbers game with this horrific outbreak.)
In the meantime we are left with what we have...simply a refusal to hire because "we really don't want to be bothered with a solar here or dollar there when we can blow trillions on meaningless shit."
One of the things that explains all these trends is that the productivity of the economy keeps improving due to advances in technology, energy and materials efficiency, and automation and information. It does not require a lot of people to manufacture a whole lot more stuff, so the fact that lots of people are not part of the productive economy is predictable.
The only way that these people can be part of the economy is through the trading of services, but for that they need to have enough money left over to spend and to offer services themselves (to people who can spend). This implies that there must be a far smaller overhead (tax and rent burden) falling upon wages in the services economy, but also that people must share in the dividends of all the gains to productivity. As long as all the gains to productivity are bottled up and hoarded by a very small slice of society (who do not spend a significant part of it on services, but re-invest it into bidding up assets even higher) there will be no demand.
Tax policy has a lot to do with this: taxes should be low on wages in the service economy, and should be high on income streaming from the ownership of assets, particularly unproductive assets such as land-value and natural resources which have always been in place. As it is now, interest on debt is deductible and capital gains are treated with favoritism. Increased land value is also deducted from the tax burden as depreciation, even though the built up value of the improvements to that land have been depreciated many times over. These are measures guaranteed to increase the concentration of wealth and to decrease general demand, but they also increase the cost of living and doing business by including the costs of over-valued assets into the costs of doing business. Taxing away appreciation to real estate will leave less income for the owner, which means it will be capitalized at less value, which means the price will drop, which means the cost of doing business and living will be lower, leaving people more money to spend. And it will shift the tax burden off of wage labor, again leaving people more money to spend. It is also the opposite to trickle-down supply-side economics. And it is not simple redistribution: a whole more of value would be produced if more people were involved in the cycle of spending and producing (but not many in manufacture).
Big plus! Well argued!
But we have far from run out of physical things that need doing. And there is no imperative to use machines where shovels will do.
And there are still a lot of US manufacturing jobs - in China and Bangla Desh! It's not over yet!
As Romney famously said, 47% do not pay income taxes.
Pissed a lot of people off.....but Captain Obvious was just pointing the facts.
Crikey....it's the dreaded double post.
I like your post since it is more likely to occur but not that likely.
"Tax policy has a lot to do with this: taxes should be low on wages in the service economy, and should be high on income streaming from the ownership of assets, particularly unproductive assets such as land-value and natural resources which have always been in place."
It is regulation that really is the problem. I can not see how more regulations will solve anything at all. One could make the Krugman arguemtnet that it creates jobs by creating another .gov bureaucracy but who pays for that? When you speak of interest, who are we paying it to and for what reason? That has been the question here on the Hedge and as well as the Ron Paul campaigns.
The result of these policies is to NOT induce people to buy real estate and to take on personal debt. This is a debt based economy and not producttion based. You said so yourself when you brought up the "service econonomy". That is a debt based economy. Therefore any growth is based on growth in debt and you can not have one without the other. Inflation becomes an automatice neccessity and that is how what we have now operates.
It is a system that is meant to steal from you and has been very effective at doing so concerning the majoity of the people who think they live in a "democracy". We already know who the culprits are and they really don't care if we know so long as the majority does not know or care.
Those who have assumed control have one goal in mind: Steal it all. They are not exacly opaque in what they do. Your points are valid if you wish to continue with that sort of system but there are many who would not wish to continue with this fraudulent monetary system.
Kleptocrasy...
Itinerant
Far ahead of rising productivity ( a ratio easily screwed with) is the mispricing of the cost of money. Let interest rates find a free market level and the trade-off between capital and labor will create new jobs.
When free money exists (printing, ZIRP, NIRP) labor doesn't stand a chance. But even if what you suggest is true, Capex is still down. The money today is all about the quick buck-getting in and getting out. Long term investments are hot potatos.
And for many entrepreneurs, watching criminals and parasites bailed out by governments (and Central Bankers exist by government decree) makes me want to do as little a possible. I don't want my efforts supporting Welfare Queens large or small.
.
I think future generations will look back on this period of history in disbelief about how 'we' could get it so wrong and have been so easily duped. ZH excluded, of course.
"I think future generations will look back on this period of history in disbelief about how 'we' could get it so wrong and have been so easily duped."
Ironically, when they say that, future generations will be in the middle of being duped, themselves.
I look back at my parents generation as they drank the koolaid for decades, and were/are lost beyond use. I rarely can speak to anyone over 60 who gets any of the core issues of our demise, always some kind of conventional 'wisdom' quip about kids today or work ethic or i've earned it or some such stupid shit.
https://www.youtube.com/watch?v=M76X433qRuM
Younger people today are starting to connect the dots as the curtain gets pulled aside. I believe future generations, as they break the ties that bind, will create a different vision.
Although I'm not over 60, give me a lump sum of the Social Security tax that my employers and I paid to the federal gubmint to now and I'll stop complaining. Oh, and stop taking Social Security from me and my employer so that I can save as I wish. Cancel the payments that the gubmint was planning on making to me when I'm in my 60s and above.
I nominate your comment for the most dumbass one of the week. The only thing the average youngster will create is a mindset of virtual reality and tweets. It wouldn't surprise me if they decide that Matrix and Surrogates are documentaries.
"The only thing the average youngster will create is a mindset of virtual reality and tweets. It wouldn't surprise me if they decide that Matrix and Surrogates are documentaries" You prove my point.
Who has applied for a job lately? Even just any job? I remember the days not so long ago when you could send a resume and cover letter on cotton bound paper. Try that now. Most businesses will not accept that form of application. If you want a job you have to have the internet and be willing to fill out a terrabyte of data for HR. If I have done it once, I have done it one hundred times and 9.9 times out of 10 you never hear anything back.
These HR's ask for data that they can not possibly use but can sell. They want your socialist security number. Is that not enough? The last job interview I had they asked for every address that I have ever lived at AND phone number. Who the hell remembers all of that shit? I lived at at least six different places while in university alone! That shit is insane. Even more insane is when they ask for your Facebook crap. I deleted my facebook account a quite a while ago because it was pointless bullshit and I never said anything there anyway. Are you telling me that I have to have a fucking Facefuck account to get a job? Really? That bachelors degree and twenty years of experience is not worth a shit but a facefuck account IS worth something and makes one employable?
Have you ever looked at corporate HR departments? They are ugly, fat, eternally single, never been laid and could not be laid without a bag of flour to find the wet spot and even then it would require two 1.75 liter jugs of Jack Daniels, sorts of women. They are dumber than rocks on top of it all. So you are both fat and stupid? Great. That sounds like the kind of company I want to work for.
To some degree you do need an HR department but what do they really do besides drink corporate coffee and eat corporate donuts all day long? What does that accomplish? Make them fatter and hyper? What is with the requirement for a valid in-state driver's license? What does that have to do with price of rice in China? I have a valid driver's license from another state so now I can't have a job? I'm am automatically disqualified it seems. Are you saying that I don't know how to drive in your state because driving is so different from state to state? Sure, once I cross that state line all bets are off. The best part is that most jobs that I apply for do not require any driving other than to arrive at work on time. What if I didn't want a driver's license and just wanted to take a cab or ride the bus or carpooled? This makes me unemployable?
Then you have the longwinded personality tests. They should just put a click box option on "I think you are probably a bunch of fucking retarded assholes since you can not even manage to spell anything correctly on your job listing much less use punctuation and yet ask for my bank account information and social security number online." Save the bullshit questions like "If your vagina itches, what would you do to find it and solve the problem?"
When you do have an interview, how many times have you met the interviewer and realized right away that the person is a complete fucking moron? You got all dressed up for nothing. They run through a script and pretend to write things down.
Here is my take on what is really going on. Employers do NOT want intelligent employees. They want wageslaves who will do whatever inane bullshit that they are told to do no matter what. They do not want anyone who will question authority or be innovative. Corporations act just like the government and totally support the government. Nothing seems to get produced except a pile of paperwork. No one actually DOES anything except tell what the .gov/corporate policy is at every turn. Creating a shitpile of .gov paperwork is not productivity but rather waste of time. Vogons.
This is why no one wants to deal with looking for work anymore. I think there are a lot of folks who would rather be working. Work is work and if you have to sweat a bit then so be it. We do not want, or need, to fill out 87,000 pages of paperwork requisitioning something or another much less give out personal information out. We only want to work and not deal with tons of bureaucratic bullshit and data theft.
Starting your own business? Good luck with that these days. If you want a job, you have to be a mouth breather and have no more than a ten word vocabulary. And a Facebook account.
"Even more insane is when they ask for your Facebook crap. I deleted my facebook account a quite a while ago because it was pointless bullshit and I never said anything there anyway. Are you telling me that I have to have a fucking Facefuck account to get a job? Really? That bachelors degree and twenty years of experience is not worth a shit but a facefuck account IS worth something and makes one employable?"
They want to see if you said anything that makes you unemployable.
I am unemployable because I already know how creative accounting works. I know how the game works and I think most everyone at ZH does too. It's a matter of if you will say anything or not. I have studied P&L's. I found descrepencies which were outright lies. I brought it to light. I did the same as Treasurer of a GOP Senate District.
Well, they do not like it when they get caught. All it is is a game of charades and I am not on their team. It really is all corrupt. Who will tell the biggest lie and how far can it be buried in the books? Hidden behind corporate policy or statuatory law.
New Class anger at the results of new class progressive policies. Keep voting socialist and it'll get better, Mao, oh sorry Obama, says it is so.
This has been my experience and observation as well. Though i wouldn't have put it so eloquently. Brilliant!
The part of the equation that I never read about is the pernicious incentives that Obama care has presented on our economy. The incentive is for employers to hire two workers, instead of one full time employee, due to the hour limitations within the law. Obama care drives up the unit cost of labor with none of the benefit going to the worker and all of it going to the bureaucracy.
The tsunami of regulation that has been hitting our economy since Obama came to office, including "climate change" regulations, enacted outside of the normal legislative process has put a bullet in the head of small business.
All of which combine to bring the US economy to the lowest level of small business ownership in history. Any economist will tell you it is small business that is the font of new jobs, meanwhile the entrepreneurial cycle is destroyed along with small businesses, which is the seed that starts the boom/bust cycle.
Lower Cap Rate = Higher P/E... I think that lower should be higher... Higher cap rates associated with greater risk, but I may have misread it?
But but but they said yesterday on TV, that low participation rate is just because the baby boomers all retiring and that is a good sign for the economy. They also said, the correction is over and stocks will go up now.