Fed's Labor Market Conditions Index Plunges Most In 7 Years

Tyler Durden's picture

While mainstream media clung to The White House spin of record monthly streak of jobs gains after Friday's payrolls, The Fed's own Labor Market Conditions Index (LMCI) paints a very different picture of the health of the American job market. With a 0.3% drop in December, the LMCI is now down 5.8% year-over-year, the biggest plunge since Jan 2010.

We are sure The Fed wishes it never created this index...


As we noted previously, that's only the eighth time in nearly 40 years the index was down on a year-over-year basis, Deutsche Bank Chief U.S. Economist Joseph LaVorgna wrote in a note to clients today. Of the seven previous occasions, LaVorgna wrote, "four were soon followed by recession."

(In the three other cases, two were false alarms, in 1986-87 and 1995-96, and in 1981 the recession began shortly before the annual change in the LMCI turned negative.)

LaVorgna said the weakness in the LMCI indicates a rising possibility of recession.

"The upshot is that the economic outlook remains fragile despite the ostensible robustness of the labor market," he wrote.

One look at the historical revisions (notably the last few months) and it's clear, however, every effort is being made to improve this data...


Perhaps the economy being handed to Donald Trump is not as 'awesome' as some would suggest?

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Dutes's picture

Guys Trump not president yet u are too early....

XqWretch's picture

but but but... unemployment <5%!!!!!

Raffie's picture

That plung chart is not correct at all. Not even close. LOL

Could you immagine if the Fed released the real unemployment numbers? The DOW and its buddy markets would be glowing red as they re-enter the reality atmosphere on Planet Unicorn.

Rainman's picture

It's not all bad... the robots have never felt moar prosperous.

Raffie's picture

Soon robots wil have rights and if you don't like it then you will be called a Robophobe.

ipso_facto's picture

Fraudulent 'Government' statistics?  What a shock.  Always remember: EVERYTHING IS AWESOME!!!

venturen's picture

it is all Obama cronies fleeing the Washington Fraud Machine!

Bill of Rights's picture

Anything to make Trump look bad lol..

orangegeek's picture

Audit the last 8 years and what you find.


8 years of made up crap.


Fuck you barry - leave now pig!!

Yen Cross's picture

  WTF? Everyone is so confident.  I don't get it!?




ajkreider's picture


The government stats are crap, because of the Fed's labor conditions chart - which is a government stat.

Sort of shocking what passes for critical thinking these days.

CoastalCowboy's picture

The goal seeking to make that mulatto crack smoking piece of shit "leader" look better is being backed out of the data cooking.  That is all. Next step they can blame Trump.

I think old Trumpster is going to turn it around on them yet again.

Paul John Smith's picture

"Labor conditions must be improving, I've received 10 apps for credit cards since yesterday."

I Write Code's picture

YoY almost never means anything.

Nobody For President's picture

Gentlemen (Using the term loosely amoung the ZH brethern and cistern):

there is nothing new about this shit.

When I was a lad getting my MBA (in Industrial Relations and Personnel) from that non-bastion of conservatism, UC Berkeley, we called the BLM the Bureau of Lying Statistics - this was ninteen ought and sixty-one. Yes, over 50 years ago. Government appointed Bureaucrats will always follow the party line, and the party line, red or blue, is always 'everything is awesome'. 

I mean, some shit just never changes, so replace your outrage over official gubernmint labor statistics with a thick layer of cynacism, and you will be happier campers, and more accurate ones, closer to the truth.


ajkreider's picture

Except that most of the people working at the BLS have been working there for 20+ years over various administrations.

I've always thought it a bit odd that people somehow believe that these career technocrat nerds just make up numbers to suit the current administration.  It's to in effect say that none of these people have any integrity at all - which could be true, I suppose, though we have no evidence to believe that at all.

Unless we count "making ourselved feel good by being contrarian" as evidence.

itstippy's picture

1961 -

American news media referred to China as "Red China" to differentiate it from Taiwan.  Chiang Kai-shek was holed up in Taiwan, still vowing to, "Return to the Mainland and defeat the Communists!"  Red China's sole export to the U.S. was yoyos.  Despite the open hostilities between our two countries, the vital Chinese Yoyo trade route remained open.

Russia beat us to the first manned space flight; the space race was on everyone's mind.  And Moscow reported that tractor production was up 75% for the fifteenth year straight.

Whittaker Chambers, national hero for exposing Alger Hiss and the Pumpkin Papers, died.  Nobody mourned.

And . . .  the Labor Market Conditions Index was robust!

William Finn's picture

Everyone I know who works for a big company is worried about their jobs.  Real salaries are an endangered species.

Vin's picture

They're getting ready to pull the plug on the economy as soon as the Donald is in.

Red Wire's picture

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I just made a new video of the S&P500 and where I think it is headed for the next couple of weeks to months. Check it out here and subscribe to me on YouTube:


Iconoclast421's picture

It has to hit -40 to become a problem.