Just In Time For Labor Day: It’s Not Payrolls Missing The Mark By Such A Wide Margin

It was a highly curious change in the shape of the labor force. Beginning October 2015 and lasting until March 2016, for six months Americans came flooding back into the labor market. Or, so they said. When the BLS’s various surveyors working on the Current Population Survey (known as the Household Survey) came calling for answers each month, all of a sudden, a whole lot more previously out of the workforce declared themselves back in.

They didn’t all find jobs; hardly any of them would. That didn’t matter, however, since for the bean counting purposes of the government’s stat-managers they merely needed to report they’d looked for a job to be included within the official labor force.

It was an astonishing leap, though more astounding its timing. Just over 2 million were added again in the space of just six months. Up until October 2015, it had taken the “recovery” – including 2014’s “best jobs market in decades” – two full years to add back the same number.

So, why late 2015?

For those reading bond yields wrong, thinking the Fed had achieved liftoff, this was a very welcome development. Ever since October 2008 when the labor force itself began to decline for the first time since the Great Depression (leading anyone honest to the two easiest dots ever to connect), Economists as well as policymakers at the Fed (same thing) had expected their successful, powerful QE’s would achieve just this outcome.

As the US economy healed, those millions of workers who had lost jobs during the Great “Recession” and then stopped searching for a replacement opportunity (while telling the BLS just that) because there was no work to be found, it had always been expected (by Economists) once the recovery did ignite they’d all flood back in the official labor force (by telling the BLS they changed their minds and were seeking employment).

Not only those millions, the several millions more who never had a chance to even look in the first place; the population expansion, slowing as it may have been, those who sadly came of age in this age when legit growth remained no better than a distant memory. They never once reported to work as they reported to the BLS there was never any point in even looking for it.

But was October 2015 really the start of something great? The Long-Awaited Great Labor Flood of Full Recovery! Of course not.

Instead, again, the timing. SNAP to it:

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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