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AmazonTania
09-23-2013, 11:41 AM
A few weeks ago, I explained a myth about the plunging labour force participation rate and the surging 'Not In Labour Force' category being a matter of demographics. Or rather, the notion that these phenonoimes were taking place due to an increase in baby boomers retiring. Ben Bernanke's comments at last week's FOMC Meeting (http://www.federalreserve.gov/mediacenter/files/FOMCpresconf20130918.pdf) stating that the Labour Force Parcipation Rate is not as much of an issue and demographics were contributing to this.



Ben Bernanke: "So, I think there is a cyclical component to participation and in that respect, the unemployment rate understates the amount of sort of true unemployment if you will in the economy. But on the other hand, there is also a downward trend in participation in our economy which is arising from factors that have been going on for some time including an aging population, lower participation by prime-age males, fewer women in the labor force, other factors which aren't really related to this recession."



Fed's Dudley and Lockhart have a different opinion, which supports mine.
Dennis Lockhart: "Lower participation may mean somewhat lower potential for the economy. That's a concern," Lockhart, speaking at a conference on creative leadership, said of the rate that has dropped to its lowest since 1978 as discouraged workers gave up the search for employment."http://www.reuters.com/article/2013/09/23/usa-fed-lockhart-jobs-idUSN9N0FI01F20130923


U.S. Fed’s Dudley see ‘Hollowing Out’ In Labor Market Including Factory Workers



Bond Buying Program has Good Degree of Effectiveness
Tighter financial conditions underscores effectiveness of QE
Not sure where full employment rate is
Labour market certainly has excess slack for now
http://www.forexlive.com/blog/2013/09/23/dudley-sees-hollowing-out-in-labour-market/



In either particular case, it shows that the unemployment situation is a big problem, not one of demographics but regarding serious structural problems regarding the US Economy. Demographics doesn't explain it, even when you look at BLS Status Flows in between months.

http://www.bls.gov/web/empsit/cps_flows_recent.htm


http://research.stlouisfed.org/fredgraph.png?g=mFm

Cigar
09-23-2013, 12:28 PM
Care to name anyone you know willing to do something about it? :huh:

AmazonTania
09-23-2013, 12:36 PM
No one. The economy will remain propped up until either the dollar fails or bond purchasers can no longer purchase bonds.

Which is more likely since the Fed is the main buyer of US Sovereign Debt.

Chris
09-23-2013, 12:38 PM
A few weeks ago, I explained a myth about the plunging labour force participation rate and the surging 'Not In Labour Force' category being a matter of demographics. Or rather, the notion that these phenonoimes were taking place due to an increase in baby boomers retiring. Ben Bernanke's comments at last week's FOMC Meeting (http://www.federalreserve.gov/mediacenter/files/FOMCpresconf20130918.pdf) stating that the Labour Force Parcipation Rate is not as much of an issue and demographics were contributing to this.



Ben Bernanke: "So, I think there is a cyclical component to participation and in that respect, the unemployment rate understates the amount of sort of true unemployment if you will in the economy. But on the other hand, there is also a downward trend in participation in our economy which is arising from factors that have been going on for some time including an aging population, lower participation by prime-age males, fewer women in the labor force, other factors which aren't really related to this recession."



Fed's Dudley and Lockhart have a different opinion, which supports mine.

In either particular case, it shows that the unemployment situation is a big problem, not one of demographics but regarding serious structural problems regarding the US Economy. Demographics doesn't explain it, even when you look at BLS Status Flows in between months.

http://www.bls.gov/web/empsit/cps_flows_recent.htm


http://research.stlouisfed.org/fredgraph.png?g=mFm


Not strong on topical economics of this sort but will take a stab at it and look forward to any feedback to correct misunderstandings.

Bernanke's not wrong inasmuch as demographics is a factor but I think Lockhart gives a stronger cause, what with higher UI payouts and other benefits, many nearing retirement can by a mere cutting back of 20% on spending reach a point where early retirement is valued higher than returning to work.

Dudley I'm not understanding as well.

What about businesses suffering the uncertainty of what the Obama administration will do next, as it seems all over the board, touting one solution after another, but never seeing anyone through.

peoshi
09-23-2013, 02:40 PM
Care to name anyone you know willing to do something about it? :huh:I thought that was your messiah's job?

Mainecoons
09-23-2013, 02:41 PM
Yes, but haven't we seen other data which indicates those people retiring may be delaying and hence their employment level is tending upwards?

http://4.bp.blogspot.com/-3Yd_okitkDc/UOcM4BsuT-I/AAAAAAAAT1c/2i3Yk45Hbjw/s400/Employment%2BDemographics%2Bby%2BAge%2BGroup%2B201 2-12.png

Looks like the older folks are remaining in the work force and finding jobs. This would lower the demographic effect.

Cigar
09-23-2013, 02:59 PM
I thought that was your messiah's job?

So you're willing to hand over appropriations to the President? :laugh:

Can't have it both ways sport.

GrassrootsConservative
09-23-2013, 03:18 PM
So you're willing to hand over appropriations to the President? :laugh:

Can't have it both ways sport.

We gave him four years to fix things. He failed.

peoshi
09-23-2013, 03:31 PM
So you're willing to hand over appropriations to the President? :laugh:

Can't have it both ways sport.So now your messiah's failure is my fault, sport?

:rollseyes:

Chris
09-23-2013, 03:32 PM
Yes, but haven't we seen other data which indicates those people retiring may be delaying and hence their employment level is tending upwards?

http://4.bp.blogspot.com/-3Yd_okitkDc/UOcM4BsuT-I/AAAAAAAAT1c/2i3Yk45Hbjw/s400/Employment%2BDemographics%2Bby%2BAge%2BGroup%2B201 2-12.png

Looks like the older folks are remaining in the work force and finding jobs. This would lower the demographic effect.



Given the economic situation, with such a slow, unsteady recovery, it may be true that those older folk past retirement age would keep their jobs longer, while at the same time those who lose their jobs and end up with greatly increased UI benefits would stop looking.

That would balance and thus, as you say, lower the effect.