Monday, August 10, 2009

Where did you go Joe?

The bullishtness of the July employment report was crafted by some one-offs, a million three in seasonal adj - did about the same in July 2008 - and the decline in the civilian participation rate of .2% which translates to 422,000 thousand jobs.

The MSM off-handedly suggests that if some of those folks are just 'taking the summer off' (sipping sarsaparillas no doubt) then they might add to the rolls in the fall.

Enquiring minds might wish to reflect upon the chart above for a few moments and consider where exactly did all these folks go - especially given annual population growth.

Shuffling through an old file I came across a comment from The Northern Trust Company here in Chicago from January 10,2006:

Noteworthy Aspects About the Participation Rate (2000-2005)

The labor force participation rate has dropped each year in the 2000-2004 period and held virtually steady in 2005. This is an atypical event because during economic recoveries the participation rate rises as more people enter the labor force. There is no conclusive research explaining the reasons for the downward trend...tentative conclusions are that increased enrollment in school in the group aged 16-24 and women aged 25-34 dropping out of the labor force for child rearing are the new events explaining the drop in the participation rate. Additional research and time will help to sort out this issue.

Well certainly time has passed, one wonders what research has wrought?

A: Not much but conjecture.

More folks in prison, more disability payments, less baby boomers ... not much in the way of a definitive explanation has been made as to why folks seem to keep on disappearing and never coming back (in aggregate and most especially if one considers population growth).

A breakdown by month this century can be had from:

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