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Labor Force Participation Rate Falls to 32-Year Low
The 7.7% jobless number doesn't tell the whole story

By Bob Stokes
Fri, 08 Mar 2013 18:30:00 ET
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Political television talk show hosts usually show impatience with "policy wonks" who rattle off statistics and obscure historical facts. 

An interviewee talking about statistics may not be as exciting as a heated political debate, but to get the full picture about a subject, one needs all the relevant information.
 
For example, consider the Labor Department's just-released 7.7% February unemployment number. The media announcements about the improved number carry a celebratory tone.
 
Indeed, it's a wonderful thing when people find jobs. Yet, another side of the American jobs picture seems to be downplayed.
 
The labor force participation rate, which measures workers and those looking for jobs, also fell, to a 32-year low of 63.5 percent. ... "The decline in the participation rate and worsening situation for the longer term unemployed reminds us of the challenges facing the labor market," said [a] chief economic strategist.
 
CNBC, March 8
 
Now, that's just one other way of looking at the jobless picture. Here's yet another way of looking at it:
 
Despite a slowly improving economy, many companies remain reluctant to actually hire, stringing job applicants along for weeks or months before they make a decision.
 
If they ever do.
 
The number of job openings has increased to levels not seen since the height of the financial crisis, but vacancies are staying unfilled much longer than they used to. ...
 
"There's a fear that the economy is going to go down again, so the message you get from CFOs is to be careful about hiring someone," said … a management professor who runs a human resources consulting business. "There's this great fear of making a mistake, of wasting money in a tight economy."
 
New York Times, March 7
 
EWI's economic indicators show that the economy will likely get even tighter. A snapshot of a single jobless number is one thing; the larger economic trend indicates an all-out contraction.
 
In the second edition of Conquer the Crash (p. 139), Robert Prechter notes:
 
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