The employment report came out last Friday and as I’m sure you may have heard, unemployment dropped to its lowest level in almost three years. Wow, that feels good to hear doesn’t it? Warms the heart. Well actually, only for most of us.
What I’m wondering is how those people feel that we stopped including in the calculation. The unemployment rate is a simple calculation; it’s the # of employed people divided by the civilian labor force. Simple, elementary math, eh? Here’s one of the rubs, the civilian labor force calculation does not include those folks, which have been looking for work longer than 12 months (I believe this is the correct timeframe; regardless, the point is that it excludes certain potentially available persons looking for work in the calculation). That’s right, if you couldn’t find a job in 12 months, you’re not included anymore. In November, 315,000 less people were considered part of the labor force as compared to October.
Ok, so let’s look at it a bit differently. What if we just simply looked at the current number of employed civilians compared to the population of the nation. It should be a much more consistent number since it doesn’t exclude anyone. Well, in November 58.5% of the population was employed. This statistic has been in the 58% zone since September of 2009 and before that, the last time we saw this number in the 58% zone was January of 1984 (which at the time was an improvement over the 57% in 82’).
I don’t even want to tell you what I was doing back in 1984, but I sure wasn’t worried about the fact that interest rates were above 11% and the unemployment rate was north of 7% (over 10% in 82’).
The bright side, the early 80’s was the start of one of the greatest bull markets ever. That’s not to say now is the time to jump in with both feet, but when things are at their worst, there is nowhere to go, but up.
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