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Strategies & Market Trends : John Pitera's Market Laboratory
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isopatch
John Pitera
To: John Pitera who wrote (17644)1/13/2016 6:18:36 PM
From: benwood2 Recommendations   of 33421
 
In past 12 months, U-6 unemployment has gone up, and the labor participation rate has gone down. That's how strong the economy is, apparently. And among all that, job growth has been primarily on the low end, and much of that with elderly (or near elderly), who either have little leverage in securing higher pay (i.e. they absolutely need the stop-gap income), or else they need the insurance above all else and so pay is by far only secondary as a consideration.

U-6 unemployment

Nov '15 to Nov '16: 9.6 --> 9.9
Dec '15 to Dec '16: 9.8 --> 9.9

Labor participation

Nov '15 - Nov '16: 62.9 --> 62.5
Dec '15 - Dec '16: 62.7 --> 62.5

I know Mish on his blog says it's statistically invalid to consider the birth death model in the employment reports issued by BLS; however, there appears to be no way to reconcile the headline job growth figures with a) the increase in unemployment and b) the decrease in labor participation rate.

Just to accommodate the growth in the labor pool, about 160k net job gains per month are required. That's about 1.9 million additional jobs per year to maintain the status quo.

The January jobs report claims that 2.65 million additional jobs were created in 2015.

So... what's missing here? With at least 700k jobs created beyond what's needed to maintain the status quo, both the labor participation rate DECLINED and the U-6 unemployment INCREASED .... ???
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