September 6, 2013

While the Establishment survey data was ugly due to both the miss and the prior downward revisions in the NFP print, the real action was in the Household survey, where we find that the number of people not in the labor force rose by a whopping 516,000 in one month, which in turn increased the total number of people outside the labor force to a record 90.5 million Americans.

And what is even worse, the Labor Force Participation Rate declined from 63.4% to 63.2%: the is the lowest print since August 1978!

Whether or not this means the Fed will continue QE at this point is largely irrelevant: what is more relevant is that the Fed so far has failed miserably at its core mandate: to boost real employment.

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