In times like these one is tempted to ask the question of whether or not the quick references we use to judge economies and investments are really apropos to all situations.
All sorts of papers have undoubtedly been written on this topic, and as we speak there is some gifted statistician probably working on some new model to explain volatility and risk, but at the moment given the current repertoire of ratios and metrics we have, this market is perhaps more perplexing than it really should be.
A few metrics whose irrelevance is made more apparent by the day could one could argue include;
People familiar with the basis for understanding the unemployment figure, know its limitations, but perhaps these aren't always as clear as they could be. For example, one could argue that our unemployment rate, is based on a cyclical and the presumption of a constantly evolving economy. Economists often argue a little unemployment is good, its the "grease on the gears" of the economy. Its a sign of people retraining, moving into bigger and better positions, and is hence a sign of positive job creation and dynamism in our economy. Given this presumption, it is hence reasonable to believe that someone who has stopped looking for work, has simply decided to hang up their hat and stopped seeking retraining, and/or is satisfied with the amount of capital they have accrued by one means or another.
The Catch; What if these individuals who are "discouraged" and no longer accounted for, are simply being disenfranchised from the economy due to lack of jobs? What if its not because of lack of training? What if it is because the ever increasing productivity of the average US worker for example, which is largely being borne by improvements in the technological capabilities associated with manufacturing. What if even entry level manufacturing positions require some sort of technological literacy. What if the jobs that these individuals were "meant" for, were simply deleveraged away, never to return? Well, clearly it seems that our current way of measuring unemployment would thus be inadequate for analyzing the situation. And as, back in October, the BLS head admitted, just before his retirement, that we will never see employment/job levels like those seen pre-recession again, we thus are faced with an interesting question with an obvious answer, what if there are structural as opposed to cyclical failings in the way people are employed, what if this isn't just a matter, of trading one professional hat for another, what if its a matter of trading the working hat for the unemployed hat, as one's job according to the BLS will never be coming back. Thus it seems as though we are looking at a horse of a different color than normal unemployment situations, and that thus perhaps the old metric is somewhat defunct, and is temporarily a vestigial limb in the body of economic analysis.
Granted there are different ways of measuring unemployment, U-X, U-Y, and U-Z, but needless to say, the inherent presumptions about "discouraged" workers, seems to need a revamping, a revamping which could lead to much higher, and perhaps one could argue more realistic unemployment figures.