labor participation rate

The Fed Focuses on the Unemployed

federal reserve buildingThe FOMC just did a great thing. The Federal Reserve tied interest rates and quantitative easing to U.S. labor. The messaging alone is powerful. The Federal Reserve is saying, very clearly, U.S. workers matter. Businesses need to start hiring and increasing wages if they want to actually improve the overall economy.

About 5 million people—more than 40 percent of the unemployed—have been without a job for six months or more, and millions more who say they would like full-time work have been able to find only part-time employment or have stopped looking entirely. The conditions now prevailing in the job market represent an enormous waste of human and economic potential.

The FOMC set out specific parameters to the ongoing QE3.

About Those 1.252 Million People Who Dropped Out of the Labor Force

evildoerThe January unemployment report created quite a stir. Many believed the BLS had simply dropped 1,252,000 people out of the labor force, discarded like trash. Is the BLS an evil doer as so many declare, or could the culprit possibly be the 2010 Census?

We already showed how comparisons between December and January cannot be done due to the incorporation of the 2010 Census data and the yearly population controls, benchmarks and seasonal adjustments incorporated into the January unemployment statistics.

While there is no mythical 1.252 million dropping out of the labor force, there are some highly unusual numbers in the BLS population controls.

The BLS starts the January month with revised population estimates, seasonal adjustments and benchmarks. This year the 2010 Census data was also incorporated into the BLS statistics. They do not go backwards in these revisions. The BLS does not backwards adjust December 2011. Here are the BLS population controls for 2012: