The Labor Force Participation Rate

The Labor Force Participation Rate.

The Non Farm Payroll number showed “robust” job gains and the unemployment rate fell to 5.5%.

Yet, the labor force participation rate is down for all age groups since the Great Recession began, other than for those 55 years and older.

Podcast Summary

Intro 0:00-4:40

Job Led Recovery? or Jobless Job Recovery


The Labor Force Participation Rate

The recent “strong” non farm payroll and lower unemployment numbers from the Bureau of Labor Statistics are discussed and challenged in light a falling labor participation rate, flat wages and other economic data that is flat or declining. The job recovery is called a “farce”.

Click here for labor force participation charts by age group.

If there is full employment with a 5.5% unemployment why does the Fed have emergency measure zero interest rates in effect?

The recovery is now based on a rising stock market and a phony labor market recovery. The non farm payroll (NFP) number is the most widely anticipated and focused on by the markets as an important signal as to whether the Fed will raise rates. The NFP number, however, is perhaps the most easily manipulated and therefore least indicative of the strength of the economy.

Markets aren’t really concerned whether the economy is strong, but whether the Fed is going to raise interest rates.

Whether the Fed is going to raise them even though dollar is strong and all central banks are lowering rates, many to negative, is discussed. No markets and phony data.

Media Agenda and Analysis

11:05-12:40 discussion of the spin that the media creates to make the economic numbers appear better than they are. Discussion of why the Fed would want to raise rates if the dollar is strong, employment is not that strong when measured by stagnant wages and the falling labor force participation rate.

Will the Fed Raise Rates?

12:40-15:45 discussion of why the Fed will raise rates.

Declining Demand from China Russia and Japan for U.S. Treasuries

15:45 -21:18 The declining demand for U.S. treasuries by foreign countries is discussed and how the Fed assists in creating domestic demand.

Discussion of the incongruity of central banks around the world lowering rates and engaging in currency debasement while the Fed talks about increasing rates. Central banks wish to debase their currencies to inflate away their debts and make their exports less expensive. Is the Fed merely pretending that all the QE worked and they can now raise rates and appear prudent so they seem credibly when they have to lower rates and start printing dollars again. The Fed is pushing the narrative that the economy and job market is so strong that if it turns out that it’s not they can claim that a reversal was “unexpected” (when it never was strong in the first place).

Stocks and Bonds

21:18-22:50 discussion of the direction of stocks and bonds in light of the NFP report and an artificial market.

Out of the Media, Out of Mind

22:50-25:57 discussion of media driven stories. The underlying systemic economic and financial risks still exist whether the media reports on them. The U.S. still has an $18 trillion deficit and massive unfunded liabilities even if it’s not in the news. Discussion of the price of gold and silver and the media shift from describing the economy as in recovery to it being “solid” and “robust”.

Consumer Credit

25:58-29:00 discussion of the decline in consumer credit despite the robust economy and job market. Consumers are saving more. This doesn’t reflect a cultural shift but rather an economic necessity. The same is true with millennials living at home.

Public Consumption of Main Stream Media Strengthening Economy Narrative

Credentials vs. Credibility

29:00-34:00 discussion of the public consumption of main stream media stories with little or no thought or attention. Discussion of reporters’ reliance on “experts” rather than investigation in producing their articles. People are persuaded by credentials rather than thought and logic. Discussion of how people will repeat, retweet and cite statements as fact if they deem it to come from a person with supposed credentials. Einstein probably said a lot of stupid things but coming from Einstein doesn’t make those statements any less stupid.

The importance of repetition in propaganda is discussed. The word “recovery” should not be used for six years to describe the U.S. economy. Recovery is a temporary period between sickness and wellness, not a six year media event.

Labor Force Participation Rate

Older Workers Taking Entry Level Jobs

34:00-43:30 Discussion of the job market and how senior citizens are taking jobs from younger workers. Review of a letter from a millennial to Real Estate 360.

Discussion of economic and cultural preferences and how they are related.

Primary Homes as Investments

43:30-51:20 discussion of the mentality of home buyers and the direction of local housing markets.

The Importance of Wage Growth and Jobs in the Economy

51:20 discussion of the lack of retail and home sales growth and the excuses that will be offered- its coming soon on the basis of recent job growth. Listeners are reminded of the “Recovery Summer” and “Welcome to the Recovery” propaganda in 2010.

Why the Job Recovery Is a Farce?

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Further Reading:

Why the Job Recovery is a Farce

Top Foreign Holders of U.S. Treasuries

How QE Causes Millennials and Senior Citizens to Compete for Jobs

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