The Reason Why The Unemployment Rate Dropped: The Labor Participation Rate Is At Fresh 31 Year Lows

Tyler Durden's picture

Curious why the unemployment rate dropped from 8.3% to 8.1%, even as just 96,000 jobs were added? The labor participation rate declined from 63.7% to 63.5%, the lowest since 1981. It means that somehow in August the labor force declined by 368,000 people, which is a paradox since according to the household survey 119,000 jobs were lost in August, yet at the same time the unemployment rate dropped. Remember: it is an election year.

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101 years and counting's picture

once we drop a few hundred k out of labor force next month, the tylers will have to expand that chart out at least 2 more decades to find a lower number.

ihedgemyhedges's picture

I thought the participation rate set an all time high new record.......oh wait, that was the foodstamp participation rate.  My bad......

FMR Bankster's picture

Nobody could do better. Bill Clinton told me so and he wouldn't lie would he?

Metalredneck's picture

Did you share a cigar with him?

Hugh_Jorgan's picture

We hear the highly decpetive BLS U-3 # when we should be hearing the BLS U-6 # from our elected "representatives". Worse, the best representation of reality is only available outside the Government @ and we will NEVER hear that number (of ~22% unemployment and climbing) from the people in charge.

smlbizman's picture

does this chart correlate to when regan went into borrow and spend mode...and shows the party is over and the waitress just gave us the check...

Coldsun's picture

That comment was a miss. We'll give you another chance. This time try proper grammar if you want to make an intelligent point and also try not to spew incoherent political crap.

Ready, go.

toady's picture

I think he/she was trying to point out the 81 date when Ronnie started the whole deficits-don't-matter thing. Turn the calender back to todays date and realize DEFICITS DO MATTER.

Also back in today, these numbers are an obvious ploy. Next month when it's magically 7.9 obama can say 'I said below 8, and I keep my promises'!

hawks5999's picture

I think this correlates more to when the Baby Boomers fully entered the labor force and reflects them now leaving. I would expect labor force participation to continue to drop back to about 1972 levels. in the coming decade.

gloogle's picture

Except that the "boomers" are now putting off retirement becuase they can't afford to retire, and are boosting the labor force participation rates for those over 65 to record levels!  Anyone out there think this trend will change anytime soon?

midtowng's picture

That's what I was thinking. That chart looks like the participation rate is about to hit mid-70's levels.

hawks5999's picture

I would say early 70's levels. 1972 to be exact. The long term trend shows that this participation drop off is the result of Boomers leaving the workforce for "retirement". Which these days means food stamps and medicare.

This chart makes me thing 1972 is our target participation rate.

Dr. No's picture

No doubt due the seasonal warm weather.

GetZeeGold's picture



Don't forget the rain......we have to move from the staduim.....looks like there could be rain.


EscapeKey's picture

Plus "all those retirees" - who, according to the same fraudnesian beancounters who make this argument, obviously won't withdraw funds from the equity markets.

All assumptions always work in favour of the status quo.

Joeprimo55's picture

Can we still blame bush?

Jason T's picture

The End of Work.


Thank you China for the trade deficit, Productivity Growth, Ben Confetti, Food Stamps, Disability...

SelfGov's picture

Thank goodness this country didn't encourage China the entire time.

azzhatter's picture

We don't need no steenking jobs. Obama gonna pay my mortgage

Whoa Dammit's picture

If you earn a lot of really good karma in this life, you might get lucky in the next one and come back as a transgender height impaired undocumnented alien from FreeStuffistan with 12 children and a bad case of chronic fatigue. Then everything you need will be handed to you. :-).

John Law Lives's picture

Maybe Obumble will have statisticians come up with a clever formula to calculate that the national debt doesn't really exist.  We are actually running a BUDGET SURPLUS.  Four more years!

100% FUBAR.

Sauk Leader's picture

I don't think he knows anyone with those qualifications. Maybe Rex Nutting at Marketwatch?

Gordon Freeman's picture

Nice to know there's someone else out there who despises that fungal toad.  Thank you!

Hobbleknee's picture

Maybe Corzine could make it vaporize.

t_kAyk's picture
I come home one particular evening
The landlady said, "You got the rent money yet?",
I said, "No, can't find no job"
Therefore I ain't got no money to pay the rent
She said "I don't believe you're tryin' to find no job"
Said "I seen you today you was standin' on a corner,
leaning up against a post"
I said "But I'm tired, I've been walkin' all day"
She said "That don't confront me,
long as I get my money next Friday"
Now next Friday come I didn't have the rent,
and out the door I went

- George Thorogood and The Destroyers

SmallerGovNow2's picture

Great tune. Cheers, one bourbon, one scotch, and one beer...

Clever Name's picture

+1 for that!

Now when he come out tha house

I could see it in his face

I knew it was no

He said, I dunno man, she kinda funny

I said I know

Everybody funny

Now you funny too.


recidivist's picture

voted least likely to succeed in his HS class.  Suck it, bitchez!

trebuchet's picture

Because there is NO POINT in looking for jobs - its called "Voluntary" unemployment

Everybodys All American's picture

By the November election Mr. Choomwagon will have a seven handle on the unemployment number. It's a virtual certainty.

Beam Me Up Scotty's picture

It's just more of the same. Baffle em with bullshit.

recidivist's picture

Prosperity is just around the corner

exi1ed0ne's picture

Prosperity every other day - yesterday and tomorrow.

docj's picture

Welcome Back Carter.

phalfa5's picture

gonna go buy me some Billy Beer wif my food stamps...  aint gubmint great?

roadhazard's picture

Billy Beer was $100 a can a long time ago. I'm too lazy to check ebay now.

bdc63's picture

This has absolutely gotta be killing government income from taxes ...

... so this is what a death spiral looks like ... good to know ...

Joe Davola's picture

Cue Bruce K with the latest dismal outlook for SSI, payroll tax rate not withstanding.

Antidisestablishmentarianismist's picture

Interesting to compare the Reagan years to the Obama years on this chart.  How can anyone doubt that both men brilliantly achieved their aims?

buzzsaw99's picture

1982 was a very sucky year for jobs

insanelysane's picture

I was in high school and worked the summer as a lifeguard.  I was making $5/hr which was a shit load as my buddies working at McDs were making around half that.  Nowadays kids can't get jobs at McDs because that is where all of the former factory workers go.

azzhatter's picture

the average age at mcdonalds in my area for employees looks to be over 50

ParkAveFlasher's picture

Well, who's gonna go out and pay the bills if junior won't get off netflix long enough to take a shower?

toady's picture

Yep. I graduated HS in 82. Things were so bad I had to join the Air Force.

Peace is the x-axis's picture

Deja vu. Exactly the same bogus outcome as Australia's official unemployment "fall" earlier this week. Thanks to a 26 year low in participation. We too have an incumbent Fearless Leader prepping to go to the polls.

tmosley's picture

Obama rounded up a bunch of unemployed people and had them shot.