Read by dozens, paid for by none, and questioned by most.
A non-economist's non-commissioned view of the economy and the absence of freely determined market prices.
Sunday, March 8, 2015
Amazing Math from the Bureau of Labor Statistics
According to the most recent Bureau of Labor Statistics release,
the UE (unemployment) rate fell to 5.5% as of February.The last time the UE rate was this low was
May of 2008.
What I’m fascinated by is the fact that the US population
grew from February 2008 to February 2015 by 16.8 million persons (counting all permanent residents, legal or "otherwise"), or a 5.5% increase in total population, and on a net
basis, not a single one of those 16.8 million persons got a FT (full time) job…while a net 2.7 million were lucky
enough to get a (or multiple) PT (part time) job.
This means that 14.3 million persons, or 4.4% of the current
US population, were added without a single job among them (chart below).This makes for fascinating math when a 4.4% increase
of the total US population without jobs can nearly halve the UE rate down to 5.5%, equal to 2008’s
UE rates?!?Source; Bureau of Labor Statistics
The recent BLS data are considered "strong employment reports" and are taken as such booming harbingers of
economic accomplishment that the Federal Reserve feels rates need to begin their long
Just to avoid some confusion on this 16.8 million population
growth…this does not mean there was a baby boom over this period…quite the
opposite as a flat birth rate has been offset by an even faster declining death
rate (the baby boom and older generations are living much longer than previous
generations…thus the pig through the python population growth). In other words, there are no more babies now than a decade ago...there are far more 55+ year olds as that is the segment of the population that is growing.
And just to make sure this isn’t cherry picking data…below
is non-seasonally adjusted raw data from the Bureau of Labor Statistics back to
’08 showing rising PT jobs and declining FT jobs.
Source; Bureau of Labor Statistics
To add perspective we back it up to ’00…and note that over
the entire period the US created 7.6 million net new FT jobs and (4 million net
PT jobs).But not a single net FT job
since prior to Feb ’08.Source; Bureau of Labor Statistics
I’m pretty confident to say that the stagnant household
income data is simply noting the loss of higher quality FT jobs with benefits
being replaced with lower quality, lower hour, little to no benefits PT jobs.
I’m sure economists will try to explain away the above raw
data as the demographic shifts of retiring baby boomers…but that old chestnut
isn’t exactly supported by the data (below).Population growth and jobs growth since ‘07 is clearly in the 55+ year
old segment (+17 million population, +7 million employees) while the 25-54 year
old working core is shrinking (-1 million population
and even faster declines in employment of -5 million).
Source; Bureau of Labor Statistics
The chart below highlights the substitution of
debt creation for the breakdown of jobs creation (and note the unwillingness to
tax ourselves now versus willingness to indebt our future generations).Source; BLS, Treasury, Federal Reserve
And below you can see the impact of the falling 25-54 year
old segment from '07 onward…resulting in declining mortgage debt, oil consumption, and general
economic activity...and the substitution of debt in place of growth.
Source; Treasury, EIA, BLS, Federal
So you decide, strong jobs data, out and out propaganda, or something in between!?!