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Thought Experiment Of The Absurd: Zero American Unemployment Before The Next Presidential Election

Tyler Durden's picture





 

Back in May, we decided to conduct a thought experiment of the absurd as these are usually the best demonstration of modern-day economic insanity, when we extrapolated, based on trailing 12 month average data in the key labor market indicators, namely the number of total employees, the number of unemployed, the size of the labor force, and most importantly, the number of people not in the labor force, just when the US unemployment rate would hit not only zero, but go negative. As a reminder, we found then "that at the current surge of those leaving the labor force, the US unemployment rate will hit 0.0% in December of 2021 and finally go negative, or -0.1% in January 2022." Today, in the aftermath of Friday's farcical jobs data, we decided to update his absurdist thought experiment, because sadly what we thought was absurdity four months ago has proven to be reality.

To recap Friday's data: the unemployment rate dropped to 8.1% from 8.3%. This happened even as the household survey showed a decline in the people employed from 142,220 to 142,101. What also dropped was the labor participation rate, which slid to 58.3% or a 31 year low.  What soared was the number of people not in the labor force, which exploded by unprecedented 581,000 in one month, from 88,340K to 88,921K! (source: BLS)

Sadly, it is this statistical ploy on the number of departures from the labor force that continues to pain the US economy in a favorable light. So let's see just how "favorable" that statically absurd future is? Reruning the numbers in our model, based again on trailing 12 month data, "A(bsurd)-Day" is now even closer - instead of hitting 0.0% unemployment in December 2021, the US will have zero unemployment in September 2021, and its first negative unemployment print in October of 2021. The one trade off: on this date the labor force participation rate will drop to 53.6%, from the current 63.5%, as barely half of those eligible for work in the US will have a job.

This is how the American absurd labor forecast based on BLS-reported August trends looks like 10 years into the future.

But what if one extrapolates merely last month's trends into the future, instead of averaging out the LTM data? Then things get really fun.

Below is the American absurd labor forecast on thought experiment steroids:

As the chart above shows, should the number of people not in the labor force continue to surge at the August rate of 581,000/month, America will be "unemployment free" in October 2016, before the end of the next president's term, which judging by the most recent opinion polls looks set to be again Barack Obama. The fine print: the labor force participation rate in November 2016 will be a record low 48.1%, and which, if extrapolated further into the future, would see less than a third of eligible US workers have a job by May 2022, as two thirds of the US population live on perpetual government handouts.

And that is the absurdity of America's labor force statistics in a nutshell.

 


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Sun, 09/09/2012 - 13:45 | Link to Comment gdogus erectus
gdogus erectus's picture

This is great news! I can't wait!

Sun, 09/09/2012 - 17:08 | Link to Comment boogerbently
boogerbently's picture

I agree with those numbers, but for a different reason.

We are losing jobs faster than gaining them.

96,000 gained last MONTH compared to 365,000 lost (initial unemployment claims) last WEEK.

At some point, as many jobs as will ever be lost, will be lost. Those last "initial claims" will get their 49 weeks of unemployment, then fall OFF the "official" unemployment stats. Meaning full employment....zero % unemployment. 50-60% of the people that WANT TO WORK will be unable to find a job, but the BLS will show unemployment at zero.

Sun, 09/09/2012 - 18:30 | Link to Comment The Alarmist
The Alarmist's picture

Forward!  Our work will not be done until everyone is equal by being out of the labour force.  Can we do it? Yes we can!

Sun, 09/09/2012 - 20:26 | Link to Comment smlbizman
smlbizman's picture

im so confused...i dont know whether i should fillout an application or send in my resigntion...

Sun, 09/09/2012 - 13:49 | Link to Comment max2205
max2205's picture

Prosperity for all! The golden era of math. Only then will govt stats be revealed for what they are ... Political garbage

Sun, 09/09/2012 - 16:08 | Link to Comment Ookspay
Ookspay's picture

Yep, numbers and statistics are like terrorists, if you torture them long enough you can get them to say anything.

Sun, 09/09/2012 - 16:25 | Link to Comment El Oregonian
El Oregonian's picture

"judging by the most recent opinion polls looks to be Obama"

Yea right... The same polls who thug Bari's crew has intimidated to get those favorable polls? Reality says the TRUE unemployment numbers are so devastating for the Americans that zerO's true approval ratings could be no better than 30% which is mostly the African-Americans and the die-hard lefties and Obots.

Sun, 09/09/2012 - 21:05 | Link to Comment Totentänzerlied
Totentänzerlied's picture

Statistics is not part of mathematics.

Sun, 09/09/2012 - 13:51 | Link to Comment Poor Grogman
Poor Grogman's picture

People are finally realizing that Keynes was right.
No one should ever have to work again now that it is finally understood that we can " print our way to prosperity"...

/ s

Sun, 09/09/2012 - 16:50 | Link to Comment Whatta
Whatta's picture

hell, i am tired of working and paying taxes anyway.

fvck 'em...send me a check butchez!!!

Sun, 09/09/2012 - 17:09 | Link to Comment boogerbently
boogerbently's picture

Between the Keynesians and the Kenyan, we're screwed.

Sun, 09/09/2012 - 14:06 | Link to Comment LeisureSmith
LeisureSmith's picture

The Great Soup Line Wall of America. Bleak. Demonocracy, get on it, i want to see the infographic.

Oh, i forgot to say please. The ones on debt and deriatives was so great , add one on unemployment/foodstamps.....please.http://demonocracy.info/

Sun, 09/09/2012 - 13:55 | Link to Comment cdude
cdude's picture

Most government reports are "thought experiments".  There is the truth; and then there is the "official story" - for the rest of us.

Sun, 09/09/2012 - 16:00 | Link to Comment DeadFred
DeadFred's picture

If "O" gets reelected and can't take us to negative unemployment he should be fired.

Sun, 09/09/2012 - 13:56 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Right, because when people stop looking for work, they disappear, this great, no one unemployed and no one working, zero government revenues - "winning" - Well in that case, long PMs and long black markets.  "Officially" everything will be fixed. < sarc off >

Being in agriculture, I would only add, "long sharecropping".

Sun, 09/09/2012 - 13:57 | Link to Comment Dick Darlington
Dick Darlington's picture

Booolish for iSomething? Must be.

Sun, 09/09/2012 - 13:57 | Link to Comment LawsofPhysics
LawsofPhysics's picture

could we see the same information with food stamp usage overlayed?

Sun, 09/09/2012 - 13:58 | Link to Comment q99x2
q99x2's picture

If Obama is going to get re-elected then Israel can nuke Iran and China can nuke Isreal and Russia can nuke the US and the US can nuke everyone else because it will be better for Israel to do it now then after the election. So the unemployment should diminish much faster than shown in the above graphs.

Sun, 09/09/2012 - 14:13 | Link to Comment LeisureSmith
LeisureSmith's picture

Hope not. Corzine ain't got shit on Thermonuclear war as far as vaporizing goes.

Sun, 09/09/2012 - 14:18 | Link to Comment Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Israel has more nukes than China. Just to keep things in perspective.

The Sturm and Drang about Iran is a bit hyperbolic.

Sun, 09/09/2012 - 17:32 | Link to Comment FoxMulder
FoxMulder's picture

Aaaaaand, its gone.

Sun, 09/09/2012 - 14:01 | Link to Comment lolmao500
lolmao500's picture

I bet Obama can get a negative unemployment rate! YES WE CAN!

Sun, 09/09/2012 - 15:01 | Link to Comment GeezerGeek
GeezerGeek's picture

I hope Obama soon is PART of the unemployment rate, negative or not.

Sun, 09/09/2012 - 14:02 | Link to Comment holdbuysell
holdbuysell's picture

Who is John Galt?

Sun, 09/09/2012 - 14:52 | Link to Comment JohnG
JohnG's picture

You rang?

Sun, 09/09/2012 - 14:18 | Link to Comment bob_dabolina
bob_dabolina's picture

How about this for a thought experiement. The following are sets of pictures from different areas of the country.

You better have hope, because it's gona' take a lot of change to fix this:

 

http://tinyurl.com/9u6weak

http://tinyurl.com/8csjlbm

http://tinyurl.com/9me45pa

http://tinyurl.com/9gn7wjf

 

http://tinyurl.com/9ab85lp

http://tinyurl.com/97mnhzp

http://tinyurl.com/9soxmsa

 

http://tinyurl.com/97ekc6l

http://tinyurl.com/9p8js6q

http://tinyurl.com/9fza2y2

I could have posted hundreds if not thousands of these but I got lazy, and I doubt anyone would have clicked through them all anyway.  

This one was pretty interesting. A guy in hazmat gear cleaning off shit and piss off of the street in an area of L.A

http://tinyurl.com/8gatrla

That pic was from an article in June of this year

The Los Angeles Department of Public Works, backed by police and firefighters, on Tuesday launched a major cleanup effort to address urine, feces, discarded needles and other health dangers cited in a recent county report.

http://articles.latimes.com/2012/jun/20/local/la-me-skid-row-cleanup-201... 

Next time you see a billionaire like Oprah building a school in Africa, or Bill Gates investing large sums of money trying to invent some magical non-flushing toilet for Africa, make sure you thank them for not putting that money to use here in America where it is just as desperately needed in some areas.

 

 

Sun, 09/09/2012 - 15:05 | Link to Comment GeezerGeek
GeezerGeek's picture

If Romney wins these pictures will be prominently displayed on every MSM paper and channel come February 2013. More, Romney will be blamed for a sudden rise in hopelessness, homelessness, poverty, you name it.

If Obama wins the pictures will remain unaddressed by the MSM, because Democrats are never responsible for human misery.

Sun, 09/09/2012 - 15:13 | Link to Comment Pure Evil
Pure Evil's picture

Not to worry. The TSA will be brought in to set up perimeters and provide copious groping to all the down and out denziens to make sure the America's homeless are safe from terrorism.

Sun, 09/09/2012 - 15:45 | Link to Comment forwardho
forwardho's picture

And this in America... I am ashamed

Sun, 09/09/2012 - 14:10 | Link to Comment Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Maybe no one really needs to work anymore.

A nano technology quantum computing lawnmower is outside mowing the lawn as we speak.

Tomorrow, it'll show up for work at the office.

I splurged at W-Mart and bought a new bathrobe to lounge around in.

Sun, 09/09/2012 - 14:14 | Link to Comment djsmps
djsmps's picture

Since last December, I have counted on the unemployment rate going down to an acceptable level before the election. It had to go gradually so that even the most obese Americans wouldn't cry "foul." But the decline will pick up. It will definitely be 7.9% or less. I wouldn't be surpirsed to see it in the sub-7% range in November. And the unemployment rate percentage is the only number that matters.

Sun, 09/09/2012 - 14:34 | Link to Comment cheetahbaby
cheetahbaby's picture

Truly excellent news!

Only people who are looking for employment are unemployed. Duh!--smack head--took me an amazingly long time to  get that.

So, using the same flawless kind of reasoning, if an individual stops looking for work they are no longer unemployed. Much easier way to leave unemployement behind than sending out those cv's, resumes and applications, and way easier than going to the job that might result from such efforts--the traditional (and seemingly passe) way to depart the unemployment designation. 

Isn't this the same logic by which people are "lifted out of poverty" because they receive welfare benefits? And by which people are deemed "educated" because they are in possession of a diploma bearing their name?

Troubles really do melt like lemon drops in the merry old land of Oz.

 

Sun, 09/09/2012 - 14:34 | Link to Comment Gringo Viejo
Gringo Viejo's picture

Only if there's an Executive Order requiring each American household to take in the laundry of their next door neighbor. There. Problem solved.

Sun, 09/09/2012 - 14:42 | Link to Comment Dr. Gonzo
Dr. Gonzo's picture

In Old Soviet Union we have zero unemployment too. Everyone get job from government. Everyone get govenment coupon for pay. Everyone get to buy moldy tomato in govenment store with government coupon. Amerika better. They invent frozen salt greese cardboard to buy with govenment coupon for food. Amerika good. The invent beer cube to hold 30 beer. You pop tap and poke hole in top to pour down stomach fast.

Sun, 09/09/2012 - 14:46 | Link to Comment Go Tribe
Go Tribe's picture

What is it you guys say - Gold, silver, guns, canned food bitchez?

Sun, 09/09/2012 - 14:52 | Link to Comment _ConanTheLibert...
_ConanTheLibertarian_'s picture

It may even get negative. When everybody is enslaved in a FEMA camp for no pay...

Sun, 09/09/2012 - 14:51 | Link to Comment Haager
Haager's picture

Just a question: Are these jobs jobs for a living - of just jobs?

Sun, 09/09/2012 - 15:09 | Link to Comment GeezerGeek
GeezerGeek's picture

Under a Democratic administration all jobs are good jobs, according to the MSM. This attitude could change on a dime if the 'wrong' person is inagurated in February.

Sun, 09/09/2012 - 15:01 | Link to Comment yogibear
yogibear's picture

Employment doesn't matter if Obama pushes everyone on section 8 housing, food stamps, free cell phones, medical and welfare.

Recieving a paycheck from the government whether on welfare or as employee has it's benefits.  

How about vouchers for new autos from Government Motors? 

 

Sun, 09/09/2012 - 15:06 | Link to Comment Snakeeyes
Snakeeyes's picture

Sure, if enough people drop out of the labor force, we could get to 0% unemployment. Just keep increasing disabililty and food stamps the way Obama has!!!!!!!!!!1

http://confoundedinterest.wordpress.com/2012/09/07/economy-adds-only-96000-workers-people-going-on-disability-greater-than-decline-in-unemployment-since-june-2010/

Sun, 09/09/2012 - 15:22 | Link to Comment mkhs
mkhs's picture

     What also dropped was the labor participation rate, which slid to 58.3% or a 31 year low.

The one trade off: on this date the labor force participation rate will drop to 53.6%, from the current 63.5%, as barely half of those eligible for work in the US will have a job.

 

A slight discrepancy?


Sun, 09/09/2012 - 15:33 | Link to Comment Divine Wind
Divine Wind's picture

 

 

Such a multifaceted problem, the honest causes of which are greed, corruption and liberalism over several decades.

The problems with the monetary system and business climate can be rectified with some tough changes and a little time. The free market, not fucked with, can rapidly recover.

What scares me is the changing U.S. workforce.

The dumbing down of the standards for both students and teachers has had a profound impact on the creative capacity of the workforce.

This is PART of the reason so many U.S. companies are looking overseas for competent workers.

This aspect could take two or more generations to repair as it comes down to the Nation, and parents, have a reverence for high educational standards and a willingness to hold back those who do not perform, despite the bullshit lawsuits.

Do I think any of this will happen here in the U.S.?

Not a chance.

Sun, 09/09/2012 - 15:42 | Link to Comment monad
monad's picture

Unemployment will be zero when everyone is dead or enslaved. Thats the plan.

 

Sun, 09/09/2012 - 15:54 | Link to Comment Hannibal
Hannibal's picture

Simply refuse!

Sun, 09/09/2012 - 16:59 | Link to Comment Riquin
Riquin's picture

There is an old spanish song that sums up the current situation, so if you know spanish go ahead and enjoy the song!!!

 

Trabajar paraqué? Como la canción: El negrito del batey - El trabajo lo hizo Dios como castigo

 

http://www.musica.com/letras.asp?letra=1491087

 

Sun, 09/09/2012 - 17:29 | Link to Comment Stares straight...
Stares straight ahead's picture

Taking this thought experiment one step further and applying the law of supply and demand, wages should approach infinity. More reason to anticipate hyperinflation!

Sun, 09/09/2012 - 21:12 | Link to Comment Totentänzerlied
Totentänzerlied's picture

Except that wages decoupled from the value of the labor performed long long ago and never looked back. ""Service economy"" bitchez.

Sun, 09/09/2012 - 17:47 | Link to Comment Lost Wages
Lost Wages's picture

Labor Camps, bitchez!

Sun, 09/09/2012 - 19:44 | Link to Comment Money 4 Nothing
Money 4 Nothing's picture

Everyone will have a job soon, just not what you expected. Making big rocks into small ones or assembling IPhones.

Sun, 09/09/2012 - 17:49 | Link to Comment Colonel Klink
Colonel Klink's picture

Shrinkage bitchez!  In the end it won't work and neither will you.

Sun, 09/09/2012 - 18:24 | Link to Comment jonjon831983
jonjon831983's picture

0 Unemployment virtually a la weimar?  With currency depreciation to warp 10?

Sun, 09/09/2012 - 18:35 | Link to Comment Ricky Bobby
Ricky Bobby's picture

Now if we can just get the 10 year negative then the government can get paid to sell it's bonds. No deficits and no unemployment - I love it when a Central Plan comes together.

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