Labor Force Participation Rate Plunges to 38-Year Low – Ep. 92

  • Happy 4th of July to everyone
  • Unfortunately, we have given up our independence to government tyranny
  • I will be back on the radio again – I’ll be on the Alex Jones Show every first and third Friday of every month when the Non-Farm Payroll numbers come out
  • I will be doing tomorrow’s show – the second hour of the show
  • The Non-Farm Payroll Report came out early this week because of the 4th of July holiday
  • The consensus forecast of 230,000 jobs was close to the actual number 223,000
  • The unemployment rate of 5.5% last month was expected to come in at 5$% – actually came in at 5.3%, the lowest unemployment rate in 7 years
  • Great news, right? Not great news
  • The devil is in the details
  • The Labor Force Participation Rate – 62.9 last month – plunged down to 62.6%
  • This is the lowest rate since 1977
  • 432,000 people dropped out of the labor force in June – twice the number of people who got jobs in June
  • Once again, these new jobs are low-paying service sector jobs
  • During the Obama “recovery” we have lost 1.4 million manufacturing jobs and gained 1.4 million wait staff and bartender jobs
  • According to the Household Survey 640,000 Americans left the labor force in June
  • Now we have a record 93.6 million Americans no longer in the labor force
  • The Household Survey reports 349,000 jobs were lost during the month
  • The only net gain – 161,000 part time jobs – represent a net loss
  • The Household Survey shows that we lost good jobs
  • When asked about the Labor Force Participation Rate number, Secretary of Labor Perez commented, “One month does not a trend make.”
  • This trend has been going down every month of every year that President Obama has been in office
  • Janet Yellen announced that the Fed would not start raising rates without “further improvement in the labor market”
  • She specifically cited the Labor Force Participation Rate and proliferation of part-time jobs as troubling trends
  • We are now further from that goal
  • The demographic leaving the labor force are young people who cannot find jobs
  • Average Hourly Earnings, to increase .2, actually came in flat, at zero
  • Last month’s .3 increase was revised down to .2, failing to beat the estimate
  • Weekly Jobless Claims expected to come in at 270,000, actually came in at 281,000 and I think this number is going to go higher
  • There have been fewer hires and fewer fires than expected because the estimates were based on the Birth/Death model, that is proving inaccurate
  • Factory Orders are down for 9 of the last 10 months – this month we were looking for -.3% and we got -1%
  • April was originally reported as -.4 but was revised down to -.7
  • Year over year Factory Orders are down 6.3% (adjusted)
  • The only time we have seen numbers this weak is during a recession
  • The economy is in worse shape now that when QE3 was launched
  • Yet the markets did not react to these bad numbers
  • They still cling to the narrative that the Fed is going to raise rates because the U.S. economy is in good shape
  • Article on Motley Fool refers to me as someone who was “right for the wrong reason”
  • The misquoted me on my prediction on (mortgage)interest rates going up
  • After I made that statement, interest rates did go up for 2 years – they did not go down until after the bubble burst
  • The Fed raised interest rates from 1% to 5-1/2 percent
  • This quote was taken out of context – read my 2007 book, “Crash Proof”
  • There are dozens of articles about the real estate bubble 2004-2007
  • The record shows that I was right for all the right reasons
  • I did think the dollar would go down after the housing bubble burst, but by the time the bubble burst the dollar was at a record low
  • The mainstream media would like to discredit my earlier predictions in order to discount my current predictions
  • The higher interest rates I predicted have not happened yet because a dollar crisis will precede the rise in interest rates
  • The fact that we have delayed the day of reckoning for so long means that we will have more to reckon with when the day ultimately arrives

Peter Schiff is an economist, financial broker/dealer, author, frequent guest on national news, and host of the Peter Schiff Show Podcast.

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