When it comes to discussing the unemployment rate in our nation today, I am often reminded of a discussion we would facetiously have on the trading desk at First Boston back in the mid-1980s. That discussion would revolve around our desk manager inquiring as to our weekly P and L (profit and loss). I can recall these humorous exchanges as if they were yesterday. Manager: “So, LD, what’s your P and L this week? ” LD: “Well, what do you need?” Manager: “Well, let’s see, if you were up “pick a number”, then we’d make our target number this week.” LD: “Well, guess what? That’s exactly what we made this week…hahaha.” After this humorous exchange, we would settle into a serious discussion as to what the real numbers were. Regrettably, in our nation today, I envision our focus on the monthly employment report to parallel all too closely the humorous exchange as to our desk’s P and L. What does the administration in Washington “need” the unemployment rate to be by the time of the election? A number with a 7 handle is the target and palatable in terms of gaining re-election. But what are the real unemployment numbers? Given that a picture paints a thousand words and in order to give credit where it is due, thanks to the widely read Zero Hedge, we learn People Not in Labor Force Soar by 522,000, Labor Force Participation Rate Lowest Since 1981,
In April the number of people not in the labor force rose by a whopping 522,000 from87,897,000 to 88,419,000. This is the highest on record. The flip side, and the reason why the unemployment dropped to 8.1% is that the labor force participation rate just dipped to a new 30 year low of 64.3%.
These numbers and the necessary discussion revolving around them are not so humorous. That said, this very serious discussion MUST be had if we are to have a degree of integrity in our national political debate. Regrettably, integrity and political are all too often mutually exclusive terms in America circa 2012. Navigate accordingly.Larry Doyle Isn’t it time to subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook? 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.
updated May 04, 2012
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