We're Not Making Actual Progress On Employment

by: Karl Denninger

And the big report is out..... (pdf)

Nonfarm payroll employment continued to trend up in October (+80,000), and the unemployment rate was little changed at 9.0 percent, the U.S. Bureau of Labor Statistics reported today. Employment in the private sector rose, with modest job growth continuing in professional and businesses services, leisure and hospitality, health care, and mining. Government employment continued to trend down.

Hmmm... Ok, that wasn't a bad guess; missed by just 5,000.

Looking inside, the bad news on the "face" is the "sticky" nature of the unemployment rate, which sat at 9%.

Click charts to enlarge

What's the household data tell us? After all, the "Birth/Death" model has a nice distortion to it, and might be overstating (or understating) the case.

Heh, that's a real move upward. It's not huge, but it's real and has to be respected. How about those who have left the labor force?

Flat on an annualized basis.

The problem here is that we're not making actual progress. Yes, it's "better," but this is the reason we continue to see the reliance on "borrow and spend more," and it goes back to 2000 - and it's not fixed.

Until and unless this chart gets out of the ditch, and there's no indication that it is, there's no solution that involves continued "support" from government transfers.

Remember folks, the bottom line on the government is this: Everything that government does is inherently a simple transfer from one hand to another. It cannot be otherwise; government must either tax the money it spends from someone or borrow it, in which case it is promising to tax tomorrow.

To support this you must have a supportable employment rate in the population. We have not and do not, and this means that we have no choice but to accept that the promises made in our nation with regard to that government spending cannot be kept, and thus will not be kept.

We're still pretending folks, and despite the apparent improvement, mild though it is, it would be wise to temper your enthusiasm.