What About the Labor Force Participation Rate?

I'm having a grand ol' time watching Fed Chair Ben Bernanke get grilled by clueless members of Congress, but it seems that everyone is ignoring my favorite economic statistic:

The Labor Force Participation Rate

The Labor Force Participation Rate is defined as "The labor force participation rate is essentially the ratio of the civilian labor force to the total noninstitutionalized civilian population 16 years of age and over."

In other words, it tells us how many people are working or looking for jobs relative to population of available workers.

The LFPR fell to 58.2% in December, the lowest since 1984. What's also disturbing is that the figure was 66% in 2008. The result is that the ~10% unemployment rate everyone is talking about is actually understated - people have just given up looking for jobs.

And that's my main worry when it comes to the stock market. If the economy is so poor that our citizens aren't even looking for jobs, why should we bet on stocks?

What's more is that the US Census Bureau is projecting a LFPR of 65.5% in 2016. How is this going to happen? We saw a jobless recovery following the bursting of the Internet bubble, and given the shrinking of key sectors like housing and financial services, where will the job growth come from?

Health care? Maybe, but that should scare us. Health care is a major source of consumer inflation - the growth of health care comes with a major cost.

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New Blog - Apple Aperture

Just an FYI to anyone who may care - I started a new site about Apple's Aperture photo editing and management software.

P.S. Read my review of Why I Fight by BJ Penn and about other MMA books.

P.S. 2 - Read Scarsdale Patch!

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