The job market still stinks

Another curious payroll report masks ongoing deterioration.

By Anthony Mirhaydari Dec 7, 2012 2:51PM

Man reading job listings copyright Tetra Images, Tetra images, Getty ImagesSomething odd is happening at the Bureau of Labor Statistics. Over the last few months, the unemployment rate has fallen rapidly from 8.3% in August to just 7.7% now. For the average person not interested in the details, it seems like things are going gangbusters.


But for those who care, the underlying data is at odds with the jobless rate. And it suggests that not only is the job market not getting better -- it's actually getting worse. Here's why.


Back in October, I wrote about how the largest statistical outlier since 2003 was responsible for the pre-election drop in the unemployment rate to 7.8%. A surge of new jobs, many part-time positions, boosted the jobs reported in the household survey.


Friday morning, there was another curious result that used a different strategy to knock down the jobless rate. This time, it was a 540,000 rise in people out of the labor force -- which continues the waterfall decline in the labor force participation rate. At just 63.6%, it's already at levels not seen since the double-dip recession of the early 1980s.



There's more.


As the unemployment rate has improved over the last few months, the percentage of the population with a full-time job -- what I believe to be a truer measure of the health of the labor market -- has fallen from 47.7% to 47.3% and remains well below its pre-recession peak of nearly 53.3%. Back in the go-go years of the dot-com bubble, this measure nearly hit 55%.




More evidence was provided by Gallup, which conducts its own unemployment survey of households. It found that the unemployment rate surged nearly a full percentage point last month to 8.3%. That takes the jobless rate to levels not seen since May. Other measures, such as the percentage of those working part-time for economic reasons and the broader underemployment measure, also suggested significant weakening in the labor market.


And if you still don't believe me, then consider the huge drop in Friday's University of Michigan Consumer Sentiment Survey, which plunged from 82.7 to 74.5 -- well below expectations of 83. The future expectations component fell a whopping 13 points to 64.6, as people start worrying about the fiscal cliff/debt ceiling debate in Washington.


All of this suggests the economy is already stalling ahead of what will likely be a rocky 2013.
I continue to recommend investors adopt a defensive portfolio posture with a focus on safe havens like the U.S. dollar, Treasury bonds, and selected shorts such as Goldman Sachs (GS) and short ETFs such as the UltraShort Euro (EUO) -- both of which I've added to the Edge Letter Sample Portfolio.


Disclosure: Anthony has recommended GS short and EUO long to his clients.


I found these positions with the help of technical screens developed with Fidelity's Wealth Lab Pro back-testing tools, which you can find here. (Fidelity sponsors the Investor Pro section on MSN Money.)


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Apr 7, 2013 11:24AM
It's going to take a LONG period of time until decent jobs are available for college grads or even anyone looking for a decent salary.  Question is why are people so dependent on just getting a job when they should be using their God given talent and designing their own future, and building wealth and success.  The tools are available - just learn to get with a good mentor and with the right mindset.   A free ebook is available  find it at
Dec 10, 2012 10:54AM

No matter what the media says,...

Obama is still a lying, arrogant, corrupt, LAZY, socialist Imbecile.   The sooner the liberals figure that out the better...

Dec 10, 2012 10:42AM
It still stinks because we have a socialist in the White House conducting a WAR on business.

Plain and simple, you would have to be stupid to hire anyone right now.  You should be planning layoffs to pay for Obamacare and other government costs.
Dec 9, 2012 10:44PM
So many opinions, so few facts... and even less answers. 
Dec 9, 2012 10:09PM
oldchum is correct, not only has the job market been going down for years now, but if you figure a more realistic deflator into the rest of the data, the whole economy has been slowing now for years. This boys and girls is the Obama depression. During the great depression people were in breadlines. Now the people have SNAP benefits. In the great depression the top 1% were affected more then the rest. Now they get bailout bonuses from the government. Despite these differences a depression is still a depression.   
Dec 9, 2012 2:37PM
The unemployment rate figure is misleading.  It only counts someone as unemployed if they had a job, lost it and are currently collecting unemployment.  It doesn't count people who's unemployment ran out & still don't have a job.  Nor does it count people who didn't have a job and can't get one.  The "real" percentage is a lot higher than 7.7%.  The reason the unemployment rate figure is going down is because as people exhaust their unemployment checks, they are no longer counted in the unemployment figure.  And what about all the people who lost "good" jobs and are now stuck with a lousy job.  Why don't they have a "suckey job rate" figure?
Dec 9, 2012 12:41PM
Yes Anthony, the job market still stinks, but I must say that where I live it is just a little bit better than it was a few years ago.

It's still difficult to find a good paying full time job for someone with experience. There are still too many people applying for the same job lowering odds for getting an interview.

Many job descriptions state a high/advanced college degree is needed, but don't account for people who have had career experience for many years. Many jobs in my area want multi-lingual applicants. And many jobs are entry level as an intern with no pay.

Dec 9, 2012 10:33AM
One-half of the United States didn't want Obama, and they were right to feel that way. Obama care plus a tax hike on job makers will add up to another recession.
Dec 9, 2012 2:21AM

SHAWN 3179....I certainly hope that you are not one of those COLLEGE educated kids......?


That us "stupid seniors" are depending on, to pull us through.?


And hopefully not becoming a Doctor, that we might have to depend on for SURGERY.?

Dec 8, 2012 8:25PM

I thought all you "financial" experts were trained in statistics.  It appears that you were not.

Also, everyone on here is a whiner.  Also a lot of you present as "facts" numbers you have only heard someone mouth without any attempt to ascertain the facts.  I hope none of you have anything to do with the market.

Dec 8, 2012 7:02PM
Dec 8, 2012 4:17PM
Hey V_L                                                                                                                                                           This is in answer to your reply from seven or so hours ago. It seems to me V_L could stand for "VERY_LITTLE INTELLIGENCE". For starters I do not live on entitlements as inferred. ,First off V_L, I retired at 55 years of age because I worked tirelessly 60 to 80 hours a week for 25 plus years and saved, scrimped and invested from my blue collar job so I could retire. So I am living off my money not the dole as you inferred. During those years I maxed my payments to SSI if you have clue as to what that means. At age 67 by Gods grace and if Obama does not screw that up I will receive over 3K a month. Second all politicians no matter their party affiliation need to stop referring to Social Security retirement and Medicare for retirees as entitlements, these were bought and paid for by payroll taxes from those of us who actually work or worked for a living, not those takers who seem to think they are entitled anyway. We all know Washington has spent our SS and Medicare already on those undeserving takers and now want cry foul and take what us workers earned. Keeping my opinion to myself would be just what you politically correct liberal loons would want, to stifle my first amendment rights and bury our constitution.
Dec 8, 2012 2:36PM

As we said before the election, wake up america. Stop letting yourself being used by the Obama progressive socalist machine!

For you collage kids that voted for Obama and the socalist party (to be fair) hope your parents will allow you to move back home! Because your chances for a real job just droped!

   You stupid seniors that allowed yourselves to be used good luck in keeping a job or finding a new one . Your chances are 25% less than a collage kids chances! Once Obama care kicks in and your employer has to pay for your insurance wich will cost him another $800+/ month you are history and no "older person" will be hired!

   Also for the uneducated stupid seniors, when you wife or husband of 30 years is refused life saving surgury because of the cost and there age. Look at yourself in the mirrow and know that you might as well have killed them yourself if you voted for Obama. "to be fair"

  The stupidiy of the american voting public is stagering but you will not get what you wanted, a  fair socalist president. Who will keep blamning everybody but his failed ideas

   As the economy keeps worsting it will become harder and harder to cover it up!

Dec 8, 2012 1:52PM

Xataran...Yes, what never makes it out of the House or Senate..Seldom becomes Law nor Mandate.


And little credibility is given to the retirees and boomers, that are jumping ship or at least testing the waters of leaving the workforce....It's a different world..

And the younger Generations under 40-50 should respect that..


Like my better half has said for years, "WE need to get out of the way for the youngins', so as they may have a better life also"....She is right.

These numbers never seem to get the press they deserve.

Dec 8, 2012 1:39PM

Crazy...You have finally made some reasonable points....And I have a tendancy to agree...

But the rhetoric used to expresses your ideas and thoughts, if it were cleaned up somewhat; Would lend more Credibility to your statements/comment.


Scumbags, pieces of shidt, turds, and sorry azzes...Lends little flower to the arguement, and may be needed sometimes to make a point to a person of like mind..

But normally takes away from stature.

Plus I also know you are more capable then that....

Dec 8, 2012 12:33PM
On a more article related note: Anthony, how many people, like my mother, left the workforce because they retired?

Or do you expect us to believe that you don't realize how the size of the baby-boomer generation is going to impact labor force participation rates as they retire?

Dec 8, 2012 12:25PM
Tallen 1120 needs to reread the US Constitution. Congress is responsible for budgeting, specifically the US House of Representatives (Article 1, section 7), not the President.
Dec 8, 2012 12:24PM

The problem with someone taxing or taking all the Rich man's money.....?


Maybe you really weren't paying much attention this past election, maybe you are not capable?  Sorry for your problems...Romney a self proclaimed Rich Elitist...Had more then his FAIR SHARE of Wealth off-shore and much of the rest , in trust or blind trust, taking every Avantage of "favorable tax laws" possible.


When people from this Class pay way less then the biggest share of the Middle Class or even sometimes the working poor, something stinks....The 12-8% they pay does not build a Nation or help it recover from a Recession....The Middle Class haven given until they have little left and then many gave up their homes for lack of jobs...Or less income, not being able to keep up..


Given the fact or problems that many were over-extended, or living beyond their means; They still were making it until the Collapse "under Republican Leadership" came along... 


And I would love to have you list; The number of Rich Elitist, that have "not recovered" or became wealthier....And you can throw in all Politicians to boot also...

You can probably count them on your fingers....??

Then tell me how many Homes that Romney or others like, him gave up....Please do.

If you can't come up with a dozen....You ought to STFU.

Dec 8, 2012 11:28AM
BoBo, the Stooge and the Tax Cheat seem more interested in finding ways to blame the coming recession on Republicans than trying to encourage economic growth. They refuse to acknowledge that economic growth and jobs are created ONLY by profit. They refuse to give up on their War on Profit. They didn't start out as idiots, their ego's made them into idiots.
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