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The unemployment rate is not a good metric. The labor force participation rate is more inclusive, and declined for the 2nd month in a row. http://www.nytimes.c

The unemployment rate is not a good metric. The labor force participation rate is more inclusive, and declined for the 2nd month in a row. http://www.nytimes.com/2016/06/04/business/economy/jobs-report-unemployment-wages.html http://www.nytimes.com/2016/06/04/business/economy/jobs-repo... Furthermore the quality of available jobs appears to have declined.

baron816 10y ago
> The unemployment rate is not a good metric. The labor force participation rate is more inclusive LFP rate is not better than the unemployment rate. There are a lot of factors that go into labor force participation, and demographics is probably the biggest. It peaked in the late 90s and has pretty much followed the same downward trend since: http://www.tradingeconomics.com/united-states/labor-force-participation-rate http://www.tradingeconomics.com/united-states/labor-force-pa...
- dforrestwilson1 10y ago
  You're making my point for me. Demographics matter. The older bubble demographic nearing retirement, and the new bubble demographic is not taking up the slack. http://www.randalolson.com/wp-content/uploads/united_states_population_pyramid.jpg http://www.randalolson.com/wp-content/uploads/united_states_... Unemployment also ignores the disability insurance bubble.
  - stinkytaco 10y ago
    Not taking up the slack implies there's something wrong with the new bubble demographic. There appears to be less slack to take up. As you pointed out, lower quality jobs.
- pessimizer 10y ago
  That's why you use the prime age (25-54) employment rate: http://data.bls.gov/timeseries/LNS12300060 http://data.bls.gov/timeseries/LNS12300060 which has only clawed about halfway back since the property bubble burst (and which has been stagnant this year to date.)
blazespin 10y ago
The reason we don't use LFP is because it doesn't impact prices that much. The UE rate does as it controls salaries which controls inflation/prices. LFP and UE are both useful metrics, but they're used for different things. I am a big fan of labor force participation as I find the shift in our culture from a working one to one that doesn't interesting. However, from the point of view of inflation (a driver of the funds rate and our economy in general), you really need to look at the unemployment rate. Another way to look at it.. Changes in LFP rarely impact currency values much. Changes in UE rates do. And trust me, currency traders are very very apolitical. They care very little for conspiracy schemes. They just look at the relevant numbers and fight with their wallet.
- ianai 10y ago
  Again, the numbers you pay attention to really depend on what you're trying to understand. A currency trader isn't exactly looking at them the same way I am.
rayiner 10y ago
Labor force participation rate is not a good metric either. It counts more people going to school as a negative and fails to account for changing ratios of working to retired people.
burfog 10y ago
What you'd really want it to separate into: 1. families with exactly one full-time job, nothing else 2. families with a full-time job and additional job(s) 3. families without a full-time job You'd want to calculate those numbers two ways: 1. for all households 2. excluding households with all members over age 65

baron816 10y ago

> The unemployment rate is not a good metric. The labor force participation rate is more inclusive LFP rate is not better than the unemployment rate. There are a lot of factors that go into labor force participation, and demographics is probably the biggest. It peaked in the late 90s and has pretty much followed the same downward trend since: http://www.tradingeconomics.com/united-states/labor-force-participation-rate http://www.tradingeconomics.com/united-states/labor-force-pa...

dforrestwilson1 10y ago
You're making my point for me. Demographics matter. The older bubble demographic nearing retirement, and the new bubble demographic is not taking up the slack. http://www.randalolson.com/wp-content/uploads/united_states_population_pyramid.jpg http://www.randalolson.com/wp-content/uploads/united_states_... Unemployment also ignores the disability insurance bubble.
- stinkytaco 10y ago
  Not taking up the slack implies there's something wrong with the new bubble demographic. There appears to be less slack to take up. As you pointed out, lower quality jobs.
pessimizer 10y ago
That's why you use the prime age (25-54) employment rate: http://data.bls.gov/timeseries/LNS12300060 http://data.bls.gov/timeseries/LNS12300060 which has only clawed about halfway back since the property bubble burst (and which has been stagnant this year to date.)

blazespin 10y ago

The reason we don't use LFP is because it doesn't impact prices that much. The UE rate does as it controls salaries which controls inflation/prices. LFP and UE are both useful metrics, but they're used for different things. I am a big fan of labor force participation as I find the shift in our culture from a working one to one that doesn't interesting. However, from the point of view of inflation (a driver of the funds rate and our economy in general), you really need to look at the unemployment rate. Another way to look at it.. Changes in LFP rarely impact currency values much. Changes in UE rates do. And trust me, currency traders are very very apolitical. They care very little for conspiracy schemes. They just look at the relevant numbers and fight with their wallet.

ianai 10y ago
Again, the numbers you pay attention to really depend on what you're trying to understand. A currency trader isn't exactly looking at them the same way I am.

rayiner 10y ago

Labor force participation rate is not a good metric either. It counts more people going to school as a negative and fails to account for changing ratios of working to retired people.

burfog 10y ago

What you'd really want it to separate into: 1. families with exactly one full-time job, nothing else 2. families with a full-time job and additional job(s) 3. families without a full-time job You'd want to calculate those numbers two ways: 1. for all households 2. excluding households with all members over age 65