Geaux4it
Intensity Factor 4-Fold
- May 31, 2009
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Captain Obama riding the USS Corn Schooner down the drain
-Geaux
Submitted by Tyler Durden on 02/14/2014 13:40 -0500
After years of being roundly ignored by the mainstream media, and certainly by self-important economists, the issue of labor force participation is suddenly up front and center, especially now that the Fed itself finds itself scrambling to explain the humiliation of hitting its 6.5% unemployment "forward guidance" threshold without proceeding to tighten as it said it would initially when it launched QEternity in December 2012.
Incidentally, we predicted precisely this when we said in December 2012 "Regime Change": The Critical Message In Today's FOMC Announcement | Zero Hedge that "using a simple forecast, based on LTM trends across all key employment metrics reveals something very troubling, for the Fed and stocks that is: the 6.5% unemployment rate will be breached in July 2013! Now granted that is simply idiotic, and there is no way that the US economy could possibly recover that fast, but that is precisely what is implied based on the ongoing collapse in the Labor Force Participation, and the concurrent plunge in the Labor Force Participation rate, which has been the biggest marginal driver for the unemployment rate, far more than the number of people who have jobs, or are unemployed (readers can recreate our calculation on their own in 10 minutes with excel)."
Granted, we were off by six months, but we were spot on about the reason why the unemployment threshold number was hit so quickly, instead of as the Fed has originally predicted, some time in 2015/2016.
So now that absolutely everyone is laser-focused more on the participation print, recently at 35 year lows, than the actual unemployment number which even the Fed has implied is meaningless in the current context, one thing to note is that while the overall number is a blended average across the US, it certainly differs on a state by state basis.
In order to get a sense of which states are the winners and losers in the payroll to participation ratio, we go to Gallup, which conveniently has broken down this number on a far more granular basis.
Gallup finds that Washington, D.C., had the highest Payroll to Population (P2P) rate in the country in 2013, at 55.7%. A cluster of states in the Northern Great Plains and Rocky Mountain regions -- North Dakota, Nebraska, Minnesota, Wyoming, Iowa, Colorado, and South Dakota -- all made the top 10. West Virginia (36.1%) had the lowest P2P rate of all the states.
Read the rest here: http://www.zerohedge.com/news/2014-02-14/us-participation-rate-35-year-low-how-it-looks-state-state
-Geaux
Submitted by Tyler Durden on 02/14/2014 13:40 -0500
After years of being roundly ignored by the mainstream media, and certainly by self-important economists, the issue of labor force participation is suddenly up front and center, especially now that the Fed itself finds itself scrambling to explain the humiliation of hitting its 6.5% unemployment "forward guidance" threshold without proceeding to tighten as it said it would initially when it launched QEternity in December 2012.
Incidentally, we predicted precisely this when we said in December 2012 "Regime Change": The Critical Message In Today's FOMC Announcement | Zero Hedge that "using a simple forecast, based on LTM trends across all key employment metrics reveals something very troubling, for the Fed and stocks that is: the 6.5% unemployment rate will be breached in July 2013! Now granted that is simply idiotic, and there is no way that the US economy could possibly recover that fast, but that is precisely what is implied based on the ongoing collapse in the Labor Force Participation, and the concurrent plunge in the Labor Force Participation rate, which has been the biggest marginal driver for the unemployment rate, far more than the number of people who have jobs, or are unemployed (readers can recreate our calculation on their own in 10 minutes with excel)."
Granted, we were off by six months, but we were spot on about the reason why the unemployment threshold number was hit so quickly, instead of as the Fed has originally predicted, some time in 2015/2016.
So now that absolutely everyone is laser-focused more on the participation print, recently at 35 year lows, than the actual unemployment number which even the Fed has implied is meaningless in the current context, one thing to note is that while the overall number is a blended average across the US, it certainly differs on a state by state basis.
In order to get a sense of which states are the winners and losers in the payroll to participation ratio, we go to Gallup, which conveniently has broken down this number on a far more granular basis.
Gallup finds that Washington, D.C., had the highest Payroll to Population (P2P) rate in the country in 2013, at 55.7%. A cluster of states in the Northern Great Plains and Rocky Mountain regions -- North Dakota, Nebraska, Minnesota, Wyoming, Iowa, Colorado, and South Dakota -- all made the top 10. West Virginia (36.1%) had the lowest P2P rate of all the states.
Read the rest here: http://www.zerohedge.com/news/2014-02-14/us-participation-rate-35-year-low-how-it-looks-state-state
