Skip to main content

To Participate or Not To Participate, That Is the Question

“The unemployment rate declined from 7.0 percent to 6.7 percent in December, while total nonfarm payroll employment edged up (+74,000), the U.S. Bureau of Labor Statistics reported today. Employment rose in retail trade and wholesale trade but was down in information”*

This employment release was a negative surprise even for those that follow an in line with estimates strategy. However as with most surprises the elements of defense and offense in the arena of diminishing reality the focus will once again ignore demographic elements within the statistics including the workers that have permanently stopped looking for a job. The question I have is why would they do that? 

The civilian labor force participation rate* declined by 0.2 percentage points in December bringing the annualized rate to 58.6 percent or a decline of 0.8 percentage points over the year. What was curious is that while there is certainty in the decline of participation in the job market, the year over year employment-population ratio was unchanged.  This tells me that while no consolation for the losses experienced by people at every economic level of the economy the total number appear to be slowing. This Leaves room for expansion of the workforce moving forward, but I wouldn't be surprised if the employment rate begins moving back towards 7% during 2014. That would be troublesome for the markets. 

Also, it should come as no surprise that young people have had a very hard time getting work in this economy. While most trends favor jobs in technology that carry a degree of sex appeal, the participation rates are in the 50 to 60 percent range for men and women over 20yrs old suggest to me that a great diversity of jobs would readily pick up the slack, and in fact already has to some degree. In the past year much of the growth outside of IT has been in Healthcare, Retail, Wholesale trade, transportation, financial activities, warehousing and manufacturing. The focus on the dearth of skills also ignores the lost traditions of corporate training programs leaving the need to generate higher profile for the many jobs that have demanded creative, marketing, writing, sales oriented and complementary social and networking skills that will increasingly be needed to meet the needs of the growing of product and service industries that even some tech companies such as Google (GOOG) and Apple (AAPL) have been migrating to for the past few years. 

Conclusion 

Today's numbers are part of a longer term trend that begins with baby boomers that have decided the need to work through retirement age. Good numbers or bad as traditionally interpreted are becoming less important if not focused on how the economy is changing. And those changing fortunes and economic circumstances that have touched millions of Americans will untimely create an economy that I believe will require more skills than are currently discounted for and that could produce jobs that are more sustainable if not more socially based. Jobs even your friendly introverted portfolio manager could love.



* Search – BLS Employment Report

Popular posts from this blog

I B!#*$ For A Living

Not really, but I’d like to. The problem is I don’t search, or that is to say I don’t search for this blog. I do search, regularly so, with the same vigor that I flip though a newspaper. I have my pet subjects, finance, art, and sports, politics (not necessarily in that order) I never look at real estate and I rarely look at style articles. One of the reasons I don’t search for this blog is because there is a fine relationship between the price (the value of an asset) and time (the freshness of the analysis) that serve to form my views. That’s the only way I can assure that my posts are mine, grammatical blemishes and all. It also affords me the privilege of some license whereby I’m open to write about almost anything that strikes me as useful in the aim to inform. That’s one of the main reasons I choose to inhabit the space, which brings light to financial news, because it’s so reliant on nearly every other market, across all cultural and political spectrums and best of all it always…

Please Don't Believe Everything You Read

“I have news for you” said Andre
And as I peered through his bad hair weave, and “coke bottle”” glasses I realized he was right.

Nowhere in our collective memories do we ever fully understand the workings of our mind. Driven not by the collective accumulation of information but rather defined by the processes eternally influenced by the random cocktail of chemicals in our heads and poisoned by the principles we carry around in our back pockets with all smug confidence.