Record 1.2 Million People Fall Out Of Labor Force In One Month, Labor Force Participation Rate Tumbles To Fresh 30 Year Low

Tyler Durden's picture

A month ago, we joked when we said that for Obama to get the unemployment rate to negative by election time, all he has to do is to crush the labor force participation rate to about 55%. Looks like the good folks at the BLS heard us: it appears that the people not in the labor force exploded by an unprecedented record 1.2 million. No, that's not a typo: 1.2 million people dropped out of the labor force in one month! So as the labor force increased from 153.9 million to 154.4 million, the non institutional population increased by 242.3 million meaning, those not in the labor force surged from 86.7 million to 87.9 million. Which means that the civilian labor force tumbled to a fresh 30 year low of 63.7% as the BLS is seriously planning on eliminating nearly half of the available labor pool from the unemployment calculation. As for the quality of jobs, as withholding taxes roll over Year over year, it can only mean that the US is replacing high paying FIRE jobs with low paying construction and manufacturing. So much for the improvement.

Chart below shows it all - that jump is not a fat finger!

And Labor Force Participation:

This is the largest absolute jump in 'Persons Not In Labor Force' on record...and biggest percentage jump in 30 years.

Chart: Bloomberg

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Eireann go Brach's picture

Long live King Barack O'robyomamma, rebuilding Amerika one foodstamp at a time!

EmileLargo's picture

Worse than Bush and that boggles the mind.

Xkwisetly Paneful's picture

Huh? But they have created so many of these czar jobs and aides for Moochelle?

Sky high food and gas prices, declining wages or exactly what the ultra wealthy adore.

Talk about efficiently eliminating the concept of upward mobility, hardly a better way of doing it.


Silver Dreamer's picture

Stuff like this makes you seriously question the intelligence of those around you.  People eat up the propaganda that the unemployment rate is dropping, but try explaining the above facts to them.  They will stare at you like the famous doe in the headlights picture Tyler shares with us from time to time.  The average person is so freakin' ignorant about how these numbers are generated, and trying to explain it to them is a waste of your time.  It's maddening!

EmileLargo's picture

Markets are "spiking" on this news of ""surprise US jobs growth". It is incredible how thick people can be. Really is incredible.

Oh regional Indian's picture

Emile, most of the money that is goosing the market from the private side is not in people's hands. All funds. People are mutually funding themselves to oblivion. And with with-drawl penalties and tax implications, most cannot.

Don't know the numbers but I'm sure Day Trader and Average J6P trader hardly figure in the market anymore.


But here in India, the fog of lies is really really thick. We have our own Sen(less)ex 36,000 punters and a fool born every minute. Black Rock is here, Franklin Templeton is here, Goldman Sachs is here, DB, ING, Barclays..... Globalization, leaches!




Thomas's picture

Ritholtz is over at Twitter babbling about how the BLS numbers are not fraudulent. Call it what you want.

Mr Lennon Hendrix's picture

Santelli metioned Zero Hedge on CNBC this fact, he mentioned this article.

Silver Dreamer's picture

It's entertaining to wonder who he is on here.  We all know folks like him are here, and I suspect quite a few do more than browse.

ratso's picture

I guess Tyler at al have never heard of working off the books.  Everyone I know knows some who is working off the books.  The grey economy is booming.

TruthInSunshine's picture

LOLstatistic of the day:

Wow. But Is the Number Real? 

February 3, 2012, 10:13 am


How many jobs did the American economy add in January?


The Labor Department estimated on Friday that the economy gained 243,000 jobs.


The department also estimated that the economy lost 2,689,000 jobs in the month.

The difference in the two numbers is in seasonal adjustment. Employment always falls in January, as temporary Christmas jobs end. So the government applies seasonal adjustment factors in an effort to discern the real trend of the economy apart from seasonal fluctuations. The actual survey showed the big loss in jobs. The seasonal adjustments produced the reported gain of 243,000 jobs.

A reason to doubt the number is that there has been a tendency in this cycle for the seasonal factors to overstate moves, in both directions. Labor mobility is down, as fewer workers quit to seek better jobs and employers both hire and fire fewer people than they used to do. If the seasonal adjustment was too large, then the gain should be smaller.


LOLstatistics Moment of the Day, sponsored by JP Morgan.

JP Morgan™ reminds everyone to eat their peas.

imbrbing's picture

Correct me if I am wrong here, but arent they really saying we lost 243,000 less than this time last year? I guess only because there are less people to lay off now?

Isn't a loss a loss anymore? This makes my brain hurt

Spirit Of Truth's picture

The more your brain hurts, the better the job government statisticians are doing.

Bernanke, Obama, etc., are simply fixing the "flaw" Greenspan found in his ideology, i.e., printing money is no longer enough to inflate mass optimism.  Outright mass deception need also be used so the sheeple can 'make believe' all is well in serving Mammon instead of God.  The upset of this false faith, when it comes, will literally be apocalyptic in scale.

Michael's picture

Everybody knows the government lies and the TV repeats the government lies.

engineertheeconomy's picture

They are FUCKING murduring the FUCKING economy by not FUCKING making FUCKING loans to the FUCKING bottom of the economic FUCKING pyramid

this leaves the FUCKING economy under a FUCKING econmic vaccuum

there is no FUCKING money in the FUCKING economy


imbrbing's picture

And Harold Camping was THE false prophet. Get ready.

TruthInSunshine's picture

Wow! 243000 New Jobs Created in January


Wow! 243,000 New Jobs Created in January

Submitted by Numerian on Fri, 02/03/2012 - 10:24

The headline number from the Unemployment Report this morning showed 243,000 jobs were created, more than the highest estimated increase by any of the economists surveyed before the report was released (the average expected increase from the economist survey was 120,000 jobs). The unemployment rate fell to 8.3%, again lower than predicted, and certainly good news for President Obama. Job growth was nearly across the board – in retail, construction, manufacturing, business services, and the hotel and restaurant industry. You can believe all this if you want, or you can go into the details in the report for some interesting context.

First, ever since the credit crisis of 2008, there has been a trend in the unemployment report that shows a declining participation rate in the job market. While a whopping number of jobs were created in January, a far larger number of people left the labor force - 1,752,000 in fact. The percent of the total working population who did not have jobs rose to 36.7%, an all time high. It’s no wonder the unemployment rate fell, when the denominator shrinks so markedly. The total number of people employed fell by 737,000. So what do you want to celebrate – the 243,000 who got jobs, or the million or so people who dropped by the wayside and are no longer counted in the data?

It makes you wonder how much faith you can put in the Labor Department reports. For example, the government, the business press, and Wall Street rarely report on the fundamental ways in which the US labor market is changing, with so many people dropping out of the work force. The press has had a hard enough time getting to grips with the Labor Department’s Birth/Death model, which over time adds to the number of people reported as employed. The model is supposed to compensate for the inability of the government to get good information on the number of new businesses created every month and which presumably add to employment. The problem is the model has been shown in the past to have significantly overestimated the number of jobs created by new businesses. Economists still don’t know if the model is appropriate, and how much of the 243,000 jobs created this month are the result of the Birth/Death model....

Shocker's picture

So even with this entire drop out of workers, we still are getting horrible numbers.

Posted this earlier but seriously, the job situation is still grim


LoneCapitalist's picture

I know many people here in michigan who are working "off the books". However, I would not call their financial situation " booming".

Buzz Fuzzel's picture

Who produces these statistics? Government bureaucrats  

Who do the government bureaucrats generally vote for? Democrats like Obama

What other statistic does this record drop in participation effect?  The headline unemployment number

What effect does it create on the headline number?  It is lowered

Who benefits from the hyperventilating media reports of lower unemployment? Obama and the Democrats

It is all a circular reference formula which is working and has worked quite well for the ruling elites every since our government starting producing these reports

TruthInSunshine's picture

Unemployment 8.3% for January 2012 - 243000 Jobs, Really?

 ‎ - Economic Populist

...Additionally the 2010 Census data was incorporated into part of the unemployment survey which gives unemployment rates and demographic data. Previously unemployment rates, participation rates were based on the 2000 Census data, with statistical yearly adjustments. Here's the crux of what changed:

The adjustment increased the estimated size of the civilian noninstitutional population in December by 1,510,000, the civilian labor force by 258,000, employment by 216,000, unemployment by 42,000, and persons not in the labor force by 1,252,000.

Below is a running tally of how many official jobs permanently lost since the official start of this past recession, with the new numbers. Increased population growth, implies the United States needs to create at least 10.27 million jobs or self-employment. This estimate assume a 62.7% civilian non-institutional population to employment ratio, as it was in December 2007, which implies an additional 4.69 million jobs were needed over a 49 month time period beyond the ones already lost.

8.230 million of the 26.87 million part-timers working low hours are doing so because they cannot get full time jobs. We cannot compare the change from last month due to the Census adjustments added to the December data. So, one needs to realize that's a hell of a lot of people stuck in part-time jobs who need full-time work.

The employment to population ratio is now 58.5%, no change from last month and at record lows. You have to go back to the severe recession of 1983, October to find such low ratios. The uber-low ratios are not a structural change, such as all families decided to have a stay at home caretaker, or magically a host of people could retire early, or magically all young people went to school as some want to claim. The low employment to population ratio are people dropping out of the labor count. Once can see this simply by the cliff dive on the ratio during 2008-2010. There is no way magically, suddenly, a huge increase of population volunteered to drop out of the labor force. These ratios are with the 2010 Census population adjustments incorporated.

These numbers are important because unemployment is a ratio, percentage or during a limited time period, the number of people actively looking for a job and counted. Many people are not counted in the official unemployment statistics, yet when looking behind the official numbers it's clear America has more potential workers and less jobs in so called recovery than during one of the worst post WWII recessions.

The January 2012 unemployment report incorporated many statistical adjustments. Additionally one cannot compare the monthly changes between December and January because all of the adjustments are added to the December 2011 data only, not spread out over the entire year, which makes a monthly comparison statistically invalid.

We'll be reviewing sections of this months unemployment report in excruciating detail so check back! Leave your questions in the comments and we'll try to dig out the answer in the BLS data.

Unemployment 8.3% for January 2012 - 243000 Jobs, Really?

 ‎ - Economic Populist

Mr Lennon Hendrix's picture

He referred to it as a "source"....

I just checked my sources, big blogs like Zero Hedge....

The Limerick King's picture



Could BLS numbers be fake?

Is National interest at stake?

Could Kleptos lose power

If numbers are dour?

Does Summers eat way too much cake?

Mr Lennon Hendrix's picture

Sipping Coffee with Ben Bernanke

[Elton John's Tiny Dancer plays as Bernanke walks on to the set wearing a sweater vest and kakis]


Thank you!


Good morning, and welcome to Sipping Coffee, with me, Ben Bernanke.  Today we have a great show in store for you.  I have some freinds stopping by; Timmah and Law Wrench will be paying us a visit!


First, a message from our sponsers....

[Are you poor?  Hungry?  Tired?  Yes?  Then you are part of the new slave class!  As part of the new slave class you are free to visit FEMA holiday camps!  You will have the luxery of one hot and two cold meals per day, showers every other day, and a communal TV that you will be able to watch for half an hour a day!  If you have any questions, please call 1-800-BIG-BROS.  We look forward in helping you start a new life....]

[Camera back on Ben]

FEMA camps look like a wonderful place for the new slave class.  It's good to see the US is still so altruistic.

[Ben walks to couches]

I have known these two for quite some time now.  We participate in the same satanic rituals, go to the same country clubs, and all have great disdain for sound money policy.  Join me in welcoming my friends Timmah and Law Wrench.

[Timmah, riding a tricycle, and Law Wrench in a clown car, enter stage left]

Please you two, sit down.


[Law Wrench Farts loudly]


Great to see you two!  We last spoke during the sacred burning of the dollar ceremony.  How have you been?


[Law Wrench farts loudly]

Great!  Are you two planning on moving out of the country soon, or do you think you own enough land in Montana to survive the economic collapse on the horizon a la Don Rumsfeld?

[Law Wrench is asleep and snoring loudly]



Me too.  We are going to break, but stay tuned because when we get back these two are going to mud wrestle in human feces!

[Tiny Dancer]


Creepy Lurker's picture

Indeed, the Tylers have arrived. I got to this article from a Drudge link this morning. Congrats, Tyler.

Mr Lennon Hendrix's picture

Drudge has the Santelli clip up right now.  Looks like we have a paradigm shift in the MSM fast approaching.

Mish better rethink his favorite blog list. 

Mr Lennon Hendrix's picture

And upon further reading, this article is on Drudge.

Hello Drudgers,

Welcome to Fight Club!

Remember, if this is your first night, you have to fight....

sun tzu's picture

Don't worry. They'll shut down blogs like this if things get too bad. 

Whoa Dammit's picture


I call it increasing use of fantasy and irrationality to evade responsiblity in the public/private sectors. Or more succintly: Mental Dysfunction.

Manthong's picture

If this is not the top, then it is the signal to go to ground.

.. but then again, it's probably time to go to ground anyway.

dwdollar's picture

If they are cheating on the unemployment number, do you really think they aren't cheating on this number? Participation is much worse than what they show here.

Calmyourself's picture

Every number, every metric will be fabricated, every stop will be pulled out.  Obama will have the Street, the press, the entire power of organized labor, federal government subverting every law, every custom, every norm.  The RULE OF LAW is over, the rest is smoke mirros and window dressing for the end game..

Gully Foyle's picture

Bubbles: We just mind our own business down here at the dump. Nobody comes down here fucking with anybody. I'm just bottling liquor... that's my job. Paid by the hour, no bullshit. Bottling Ray's Good Liquor. It's a dirty, sassy liquor. Ahhh... so sassy.

Normalcy Bias's picture

I'm partial to Ray's Liquor Sauce myself. TPB kills. It's help tide me over until the new season of Eastbound & Down.

HungrySeagull's picture

Just another club on the dying horse.

What's a million or 50 mil? Tomorrow it will be revised quietly to 4 mil.


Never mind the old 99'ers who are probably all off the rolls by now.

Yamaha's picture

Facts just don't matter anymore. As I travel business in the Northwest US are closing everywhere and people are getting laid off. There doesn't seem to be any improvement in the real world - but I must be on an island.

caerus's picture

an impressive bit of statistical chicanery indeed


edit: interestingly, LIESman is on cnbs insisting that people DID NOT drop out of the workforce

RockyRacoon's picture

His comment was interesting.   The Census found more people.  

What?  Were they hiding under rocks or something?

Freddie's picture

Thank morons who watch TV.  TV viewers keep these people in power.  If you watch TV or pay for bcable then you enable it.

sun tzu's picture

TV is no different from the internet. People can get Fox, CNN, MSNBC, CNBC etc on the internet. 

engineertheeconomy's picture

sun tzu go back to watching tv you fucking moron

midtowng's picture

How can Obama be worse when he's simply carried on the same Bush policies?

Confused's picture

Bush policies, obama policies.....really no difference. Totally agree. They serve a higher order of evil.

Confused's picture

Bush policies, obama policies.....really no difference. Totally agree. They serve a higher order of evil.

midtowng's picture

I think someone would be hard pressed to find any significant difference between the policies of the two presidencies.

That in itself is increadibly damning to the Obama Administration. In fact, it is the worst possible thing you could say.

Xkwisetly Paneful's picture

I'll play along.

Forget Obamacare and the 168 federal boards and agencies it created along with the uncertainty regarding adding further costs to full time hires which is already a staggering 35% over wages(temp agencies couldn't exist charging 30% if it was less than that).

At no time in the history of the world have US corporations hoarded cash like they are and collected virtual zero percent on it obviously losing to inflation instead of trying to invent the next great mousetrap.

Why would that be? A hint-fear of what is behind the neo marxist's door number three is a leading candidate.

Contrary to some recent lunacy around, economic expansion doesn't come from creating more grocery checkers and toll takers, it comes from the leading edge of the economy.

But thanks for playing.

Freddie's picture

Bush sucked but this is light years worse than Bush.  Bush was heaven compared to this sh*t.   John Corzine gets away with stealing $1.2 billion?  Obama runs $1 trillion yearly deficits?  Wide open borders.  The Treasury being looted at light speed.  Inflation around 10% or more.  A servile media and press.  Czars everywhere and they are accountable to no one.  GM and other mega corps getting sweetheart deals, bailouts, frauds, free money.  If Bush had one Solyndra, GM, Fast and Furious gun running or half the sh*t O has done - he would be impeached.  

The f**ks saying there is little difference voted for the muslim.

Cathartes Aura's picture

yeah Fred, and Bush was light years worse than Clinton, who sucked but was light years worse than Dubya's Dad, who sucked but was light years worse than Raygun, who blew the deficit UP by sucking light years worse than. . .

normally I just roll on by you, and others who repeatedly post how the CURRENT FIGUREHEAD is the "worst eva!!!!" - all the while the WHOOSH of reality flashes over heads - but today, what the hell, I'll play your game and "reply" to your wailings:

what amrka has is continuity of governance - seamless, downhill pillaging of whatever can be disappeared while they can, jobs, homes, health, wealth, "resources" - it's a FIRE SALE and all you get is pay-per-view leftovers.  

it doesn't matter WHO is "prezzydent" - they're all in place to give you whiners someone to hate, and someone to "vote out" while you spend your time campaigning, then waiting in line to "cast" your hope for change.

what the fuck ever.

Calmyourself's picture

Unfortunately he and his statists seem to be much better at implementing stupid ideas than his predecessor.  Keep in mind I do think Obama's rise is all Bush's fault..