September Employment Report: 368k Exit Labor Pool
Posted by Larry Doyle on September 7, 2012 9:32 AM |
The September employment report was just released. Many analysts, economists, and political hacks will regurgitate the numbers 8.1 and 96k. These numbers represent respectively the current unemployment rate and the increase in non-farm payrolls.
While these numbers are of very real interest, they are not the most important number to gauge the health of our overall economy. What number is most important? 368k. What does that represent?
That number is the decrease in the overall labor force, that is, the number of people in our nation who literally have gotten so discouraged as to have given up even looking for work. With that decrease the overall labor force participation rate now stands at 63.5%, the lowest level going back approximately 30 years.
My description of a “walking pneumonia” economy remains firmly in place. If anything the pleurisy is only deepening.
There remains an enormous gap in level of employment based on level of education. Unemployment for those with college degrees remains below 5% as highlighted by the Bureau of Labor Statistics.
The economy as a whole continues to reflect major structural issues with the bulk of the pain being experienced by those with less than a high school diploma. That fact is clearly very disheartening yet not all that surprising. I do not envision this reality changing anytime soon.
When might America like to start having the discussion of urban education with its ~50% graduation rate, public teachers unions, and all of the major social issues highly correlated with single parent births? Anybody?
Regrettably few in Washington or our state capitols have the stomach for that discussion. Who is happy to highlight this structural issue? Take a listen to Matt Ferguson, CEO of CareerBuilder, who speaks volumes in this quick 2-minute Bloomberg clip.
I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.