From Mish:
…Digging deeper into the Household Survey, we see some more interesting data. In the last year, the civilian population rose by 1,817,000. Yet the labor force dropped by 1,099,000. Those not in the labor force rose by 2,916,000.
In January alone, a whopping 319,000 people dropped out of the workforce. In February another 87,000 people dropped out of the labor force. In March 11,000 people dropped out of the labor force. In April, 131,000 dropped out of the labor force. The 4-month total for 2011 is 548,000 people dropped out of the labor force…
Mish goes on to note that if people weren’t leaving the labor force at this pace, unemployment would be well over 11% – in other words, at Depression level. During a recovery, the labor force participation rate should be going up, not down – as usual, I go with my theory of ignoring what people say and referring to what they are doing. The Obama Administration and the talking heads on TV can say whatever they want, but what people are doing indicates a continued recession.
I also take note of the huge drop in labor force participation in April – after becoming small in February and negligible in March, the April number skyrocketed. Conveniently, just as we started to note rising new claims for unemployment. Is it number fudging? I don’t know – it could just be bureaucratic inertia. From what I understand, the Bureau of Labor Statistics has this statistical gizmo which calculates how many jobs should have been created as this or that point, presumptively based on past experience. As we are officially in recovery, my guess is that the gizmo says “at this month of recovery, history shows an average of X jobs being created”; presto, we get 244,000…but not a single person on earth can really tell you if that many jobs were created. Fundamentally, it is a guess and it will be many months before we know if the guess was right (though for the past couple years the guess has been fairly consistently wrong – with much fewer jobs being created than the original headline asserted).
Be that as it may, the bottom line is that our “recovery” is anemic, at best…and my view is that we’re heading straight back in to recession; led there by higher gas prices (and, yes, the collapse in oil prices will help, but I believe the damage has already been done).
Blogs For Victory 