Record 95.4 Million Americans Are No Longer In The Labor Force As 968,000 Exit In One Month

In what was otherwise a mediocre jobs report, in which the establishment survey reported that a lower than expected 261K jobs were added to the post-Hurricane economy, the biggest surprise was not in the Establishment survey, but the household, where the unemployment rate tumbled once more, sliding to a new cycle low of 4.1%, for all the wrong reasons, because a quick look at the participation rate metrics showed that in October there was a sharp decline, with the labor force part. rate sliding from 63.1% to 62.7%, back to 4 decade lows...

... driven by one disturbing metric: the number of people who exited the labor force soared by a near record 968,000 in October - the third highest on record - pushing the total number of people not in the labor force to a record 95.385 million, as the civlian labor force shrunk by whopping 765,000 in one month.

This took place as the number of employed Americans declined by 484,000, however since the unemployment rate denominator dropped more, it translated into an actual decline in the unemployment rate!

So much for economist hopes that potential workers from the fringes are coming back to the labor force. Of course, the implication is even worse: with more slack being created in the form of workers who are leaving, not entering, the labor force, this creates a buffer for wage growth, and suggests that any hope for rapidly rising wages has once again been derailed.

Comments

FireBrander YUNOSELL Fri, 11/03/2017 - 10:47 Permalink

I know one of those that exited.>Family was paying through the nose for health insurance and child care for 3 kids.>They ran the numbers, the wife stopped working, husband refuses all overtime.>Family of 5 gets free Medicaid and no daycare costs.>Net income wise, they now have more money to spend with just his income.The "system" is getting what it rewards; not working...

In reply to by YUNOSELL

JuliaS YUNOSELL Fri, 11/03/2017 - 14:12 Permalink

Falling price electronics? I wish. My component costs for electrical engineering have been creeping up over the last 3 years. Many computer components are also climbing upward. The banks are printing well in excess of increasing industrial productivity. Even things that are supposed to be deflating aren't. And the Fed keeps complaining about not meeting inflation targets.Meanwhile it costs me 4-5 times more to buy the same amount of food than 20 years ago, rent is 2x of what it was, gas 4x etc. And my official salary is only 20% higher than it was back in 1997, forcing me into side gigs, short term contracts, craigslist, ebay etc.I go with George Carlin's school of economics: "When your needs aren't being met, drop some of your needs".

In reply to by YUNOSELL

2Blondboys beemasters Fri, 11/03/2017 - 11:38 Permalink

It is a factual statement. The issue is and has been for years that millions of working age are no longer working. I know many of working age that work off the books. So they retired, took early SS and are working for cash.

Additionally, many young people in school are not working. I believe working age is 16 and older. This bracket of those 16-21 I believe show the steepest decline of working. As an employer, this stat appears to be true. Many in college today live off their loans. They do not work. If they do it is for cash.

The underground economy is flourishing.

In reply to by beemasters

2Blondboys beemasters Fri, 11/03/2017 - 11:38 Permalink

It is a factual statement. The issue is and has been for years that millions of working age are no longer working. I know many of working age that work off the books. So they retired, took early SS and are working for cash.

Additionally, many young people in school are not working. I believe working age is 16 and older. This bracket of those 16-21 I believe show the steepest decline of working. As an employer, this stat appears to be true. Many in college today live off their loans. They do not work. If they do it is for cash.

The underground economy is flourishing.

In reply to by beemasters

Endgame Napoleon Five Star Fri, 11/03/2017 - 19:00 Permalink

For every full-time job that pays enough to cover basic living expenses without unearned income from a spouse or government, a deluge of applicants compete against you, unless the job is not advertised due to being filled by friends or family of employees or the employer or unless it is one of the few job categories requiring rare skills.

For every substantial job, replacing a long-term employee exiting the workforce or moving to another position, there are 50 jobs where employers replace the departing worker with a part-time mom worker whose spousal income or welfare / child tax credits enable her to work for a pittance or a revolving door of temp workers. These jobs are constantly advertising for workers; managers never / ever find a permanent hire (on purpose).

In reply to by Five Star

Endgame Napoleon Ntoxic8ingWave Fri, 11/03/2017 - 19:18 Permalink

Employers are not replacing most of those retiring boomers, or they are not offering the same quality of job to succeeding generations, not just the millennials, either.

Automation

This was a good article, pointing out one of the ways that the employment numbers are deceptive. The numbers on income levels are, likewise, inaccurate.

The whole “median family income” is a way to to inflate income. Most Americans are not married anymore, including most of the people with children.

Economists do not count multiple streams of unearned income from welfare and child tax credits in most measures of poverty when describing the plight of single parents, yet even though we have a 62% out-of-wedlock birth rate in America, they focus on median family income, like the USA was still mostly composed of married households.

They completely bypass per capita income, ignoring the 28% of childless Americans over 40 and a ton of younger people currently in that category—i.e. the people who do not qualify for free rent, free groceries and child tax credits that max out at $6,269. They do this even though more Americans are single all of the time.

In their “median income” tabulation, do they count all of the income of seniors, grown children and extended family, living in households with basement dwellers who cannot afford rent on today’s temp, part-time, low-wage and churn jobs? This is not the same thing as a married couple with finances intertwined.

In reply to by Ntoxic8ingWave

hotrod Fri, 11/03/2017 - 09:14 Permalink

A lot of people are out due to Stock appreciation in IRA. 401K, early retirement.  Should the markets tank financial life vest will sink.

Giant Meteor hotrod Fri, 11/03/2017 - 10:06 Permalink

A lot of folks remember all those other folks getting boned in the last 401 K (kerplunk) retirement round up //Folks know the shitstorm is teetering on razors edge , ..Some may well have the attitude, get it now, while the getting is good ..Now somebody can stick that into their metric formulators and smoke it ..

In reply to by hotrod

Money_for_Nothing LawsofPhysics Fri, 11/03/2017 - 10:45 Permalink

What is funny is all the people who agonize who will be appointed as Fed Chairman. Give you a hint how it has been going lately. If they want to raise interest rates they put in a dove. If they want to lower interest rates they put in a hawk. Anyone who thinks the public Fed board is anything but a group of shills is kidding themselves. Hair-Guy would say that Ancient Aliens sets the rates. Stichen (RIP) would say Anunnaki.

In reply to by LawsofPhysics

whatswhat1@yahoo.com Fri, 11/03/2017 - 09:18 Permalink

A man went to apply for a job. After filling out his applications, he waited anxiously for the outcome.The employer said, "We have an opening for people like you.""Oh, that's great," the man exclaimed. What is it?"The employer answered, "It's called the door."

sudzee Fri, 11/03/2017 - 09:21 Permalink

50 million crypto traders and only 16million coins available. Bitcoin needs to start moving soon to soak up a few trillion from move from freely printed fiat to the new world order in assets.