Unemployment Lowest Since 2008, And It’s Bad News…

Numbers recently released by the Bureau of Labor Statistics show that the Unemployment Rate has dipped to 5.9%. Those individuals who believe the US economy is going through a recovery phase hailed the numbers as a sign of the long-awaited light at the end of the recessionary tunnel. Vice President Joe Biden is one such individual, as he recently opined in a speech to the US Chamber of Commerce:

“This new jobs report out this morning, hopefully is going to provide a lot more opportunity or some good news to the grit and determination of the American people,” Biden said during a speech in Washington at the U.S. Chamber of Commerce.

As we can see in the chart below, the Unemployment Rate has steadily decreased from a high of 10% in October of 2009. Overall, the recent number is the lowest seen since July of 2008.

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Sounds like victory right? Wrong.

Let us turn our attention to another piece of data that is vital to put the Unemployment Rate into context: The Labor Force Participation Rate, which generally-speaking is the ratio between those currently employed versus the entire adult working age population. The most recent number shows a rate of 62.7%. You can see this in the chart below. After examining the chart below, what do you notice?

Capture1

We can see that the Labor Force Participation Rate is the lowest it’s been in 10 years.

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Indeed, the Labor Force Participation Rate is the lowest it’s been in 36 years, since 1979.

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Here’s what this means: Those who are trumpeting the improvement in the Unemployment Rate either don’t understand the US Labor Market and how it is tracked, or they’re liars. Take your pick.

When the government tracks unemployment, they only count those are are unemployed but are still looking for work (at least technically, if not seriously). They don’t count people who consider themselves out of the labor force as “unemployed”; for example, retirees, stay-at-home moms, and the permanently disabled. They don’t contribute to the unemployment rate. But when people stop looking for work entirely, they also are dropped out of the unemployment rate.

We can see that unemployment is apparently falling, which seems like a good thing when taken on it’s own. But when compared to the Labor Force Participation Rate, which is at 36-year lows, we can see the truth of what’s going on here: more people than ever before are dropping out of the workforce entirely, and that is why unemployment is falling. This isn’t good news at all. This is bad news. This is terrible news. This means that more people than ever have totally given up looking for work at all. This means that record numbers of people are living on food stamps and other forms of government “assistance” (aka “welfare slavery”). This shows that more and more people have been giving up hope that they will be able to re-enter the workforce. The death of optimism is a terrible thing

We are not in an economic recovery. We are in a period of prolonged economic stagnation. The general economy continues to sputter along just over recession because the Federal Reserve continues to buy securities and keep interest rates low. That can’t go on forever, lest inflation start to become too severe. Inflation has already started to pick up; I don’t know about you, but I’ve certainly noticed that my average $50 per week towards groceries has bought me less and less over the past few years. If you examine your own food budget, I’m sure you’ll notice the same trend.

If the US economy were based on the framework of a truly Free Market and sound currency, instead of fascistic “Public-Private Partnerships” in the market and inflated government fiat currency, none of this would be an issue. Going forward, the refrain echoing through the heads of all Americans who desire a return to economic prosperity should be the same: “Shutter the Federal Reserve.” Let freedom ring.

 

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