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Unemployment Is Falling But Smart Money Isn't Buying The Headline Number

Published 12/05/2016, 01:04 AM
Updated 07/09/2023, 06:31 AM

Labor force participation rate has been dropping steadily since 2000 (see chart). Central planners can't explain it or refuse to touch it. They assure those affected not to worry. Those with a job don't care. What the hell, the economy is doing great and making America Great Again is as easy as campaign slogan, right?

The computer doesn't buy it. Although smart money should be skeptical, they represent a very small minority that few will listen to until the panic begins.

Society, a product of social and economic forces, is highly dependent on confidence. If it falters, a declining participation rate as well as many other troubling economic statistics will matter as the public demands real answers (rather than slogans) to difficult questions.

Gold, the dollar, and equities will rally together, not because of economic strength but rather failing confidence in central planning and the system they're touting.

Civilian Labor Force Participation Rate

Unemployment is 4.6 percent, but a more realistic rate is higher

The national unemployment rate fell to 4.6 percent in November, the Labor Department said Friday. But relying on that one headline number as an indicator of the economy's direction ignores important information just below the surface.

Every month on "Jobs Friday," the Bureau of Labor Statistics releases a bunch of data, each point of which provides its own unique perspective on an aspect of the nation's employment situation. Economists look past the official unemployment rate — that 4.6 percent figure, also known as the "U-3" rate — to other metrics that give their own nuanced view of jobs in the country.

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