For almost two years [5] (most recently this week [6]), we have been vociferously explaining the dismal fact that "quantity" of jobs in this recovery is no match for dreadful "quality" of jobs [7] as the "born-again jobs scam" [8] contonues to roll on. Bloomberg's Matthew Klein has decided that nine pictures [9] are better than a thousand words as he explains (in short sentences and simple charts) what the jobs report really means...
Via Bloomberg's Matthew Klein (interactive graphic here), [9]
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And (as we noted previously [8])...
...So Bernanke promises to keep the money market and repo rates----that is, the poker chips for the casino----at zero until “well after” the unemployment rate drops below 6.5 percent. But it will never get there because the jobs market and Main Street economy are structurally broken. Indeed, measured on a consistent basis, the unemployment rate is still over 11 percent based in the labor force participation rate of late 2008 and is over 13 percent based on the labor force participation rate at the turn of the century.
And no, that can’t be explained away by the baby boomers going on Social Security. During January 2000 there were 75 million Americans over age 16 that did not hold a job. Today there are 102 million in that category---about 27 million more. Yet the number of participants in OASI (old age social security) is up by just 6 million during the same period. Moreover, there is no doubt about what happened the other 21 million citizens: they are on disability, food stamps, welfare or have moved in with friends and relatives or landed on the streets in destitution.
In short, the US economy is failing and the welfare state safety net is exploding. And that means that the true headwind in front of the allegedly “cheap” stock market is an insuperable fiscal crisis that will bring steadily higher taxes, lower spending and a gale-force of permanent anti-Keynesian austerity in the GDP accounts. And for that reason, the Fed’s strategy of printing money until the jobs market has returned to effective “full employment” is completely lunatic.