5 years into the official economic “recovery” the labor participation rate is still lower than when the recession was declared over in June 2009 by almost a percentage point. It is still over 4 percentage points lower than when the recession officially began. The Federal Reserve chart of employment as a percentage of working age adults proves the point that sometimes a picture is worth a thousand words – sometimes much more. Words: 388; Charts: 1
So writes Monty Pelerin (www.economicnoise.com) in edited excerpts from his original article* entitled Did 5% of The Population Win The Lottery?.
[The following article is presented by Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com and www.munKNEE.com and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]
Pelerin goes on to say in further edited excerpts:
The following chart is a Federal Reserve chart of employment as a percentage of working age adults. Sometimes a picture is worth a thousand words. Sometimes much more.
We all know the economy is recovering because the Administration, their media minions and the sell-side analysts on Wall Street tell us this routinely. Most of us also know the propensity for government manipulation of data and/or definitions in a manner that will overstate reality in a favorable fashion. Nevertheless, let’s accept the data and the chart from above.
There is something wrong with the above chart!
- It contradicts claims that we are in an economic recovery.
- The recession appears to have been declared ‘over’ prematurely. The gray bar on the chart is the “official” dating of the recession, declared over in June 2009. If it had ended, then why did the labor participation rate continue to decline?
- From the onset of the declared recession to the end, the participation rate declined 3.5 percentage points yet it continued to decline another percentage point after the recession had officially ended. This behavior is not normal.
- Five years into the “recovery” and the labor participation rate is still lower than when the recession was declared over by almost a percentage point. It is still over 4 percentage points lower than when the recession officially began.
This simple chart shows one of two things:
- There is no recovery, even five years after announcing that there was. The economy, in terms of labor participation, is lower than during the Great Recession.
- Either the above or about 5% of the working population hit the lottery and have no need for employment anymore. If one defines the lottery as being encouraged not to work as a result the increased rewards for not doing so, that might be an explanation.
Regardless of what the cause for the above graph is, it ensures that the country will be poorer than it need be.
[Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]
*http://www.economicnoise.com/2013/07/10/did-people-hit-the-jackpot/ (© 2013 Monty Pelerin’s World. All rights reserved. )