The household survey counted 847,000 new jobs in Jan.
It has also been showing over 371,000 per month for the past 5 months.
The household is more inclusive and is used to determine the unemployment rate.
This month's numbers were praised for it's accuracy in factoring in the discouraged and underemployed.

It is before any of the various issues regarding the 'surge' of employment participation in the mid 2000s and the current 'weak' employment participation in 2011.

The trends are highly predictable and relate to the aging workforce, and the entry into retirement by the baby boom generation. The baby boom began in 1946 at the end of the War. That cohort is now 66 years old. Retirements begin rising at 60 and above (401k payouts begin at 59 1/2, SS payout can begin at 62, many government pensions begin at 55), and based upon the demographic trends employment participation would peak in 2005 (as it did) and begin to decline after 2009 as it has.

Participation is not anticipated to recover to 67% at any time in the future, but to go into a long term declining trend to the low 60s% by 2020. The reality is that through 2012 and after there will be waves of retirement. If job growth can continue above 200,000 or even close to that level, the wave of baby boomer retirements will push unemployment under 8% by year end.

Oh, and labor shortages could get incredibly severe by 2015. The shortage in IT right now is becoming increasingly problematic. Unemployment rates in IT are under .5%. Labor markets where I live are already getting tight, as the Midwest unemployment rates are falling below 5%.

I think a number of those 1,752,000 could be standing in break rooms with 'Congratulation on your retirement' cakes being put on paper plates.

Here is the article:

http://www.bls.gov/opub/mlr/2002/09/art3full.pdf

The people who really cannot afford buying autos better make sure that the car is big enough to house a family, be able to disengage the GPS monitoring, be ready to leave at a moments notice and have backup camping gear.

I've been working in and out of Houston Texas for the last 3 months and there are lots of jobs around the Oil industry with the current Fracking Boomlet. On the flip side I have never noticed so many panhandlers, been panhandled so much and in so many different places as Houston. Also if you have any type of criminal record, too many tickets in the last 7 years, poor credit due to no job, or smoke pot and fail a drug screen, no decent job for you. There is work for the select few.

"There are two types of folk music:
quiet folk music and loud folk music.
I play both."

Dave Alvin

The whole world is shit motifs has got to be tiring. Amazing how good news can be morphed into an ever expanding horror. Also a basic misunderstanding on jobs. The numbers change a lot in terms of individuals. 240k jobs created is 3.5 million losing their jobs and 3.75 million finding jobs. That's why the natural rate of unemployment is 5%.

The BLS unemployment report Friday was the most messed-up communication from our data minders that I have seen in a long while. There is indeed a number for everyone in this report, allowing you to draw whatever conclusion you want about the economy. My interest in my post was on the declining rate of participation in the labor force, which I'll get to in a minute, including Scotjen's reference to demographic influences from baby boomer retirements.

First, some observations from reading over a dozen different interpretations of what all these numbers mean.

1) English matters. The opening paragraph of the BLS press release says "Job growth was widespread, with large gains in professional and business services, leisure and hospitality, and manufacturing." In reality, nothing of the sort happened. In January, 2,689,000 jobs were lost, because around that number of jobs are eliminated in the labor market every January after the Christmas season is over. To be technically precise, the BLS press statements should begin by saying "on a seasonally adjusted basis", reflecting the fact that the BLS adds or subtracts a fudge factor to the real numbers to compensate for known market phenomenon like Christmas season hiring and firing. The Bureau of Labor Statistics never does this and hasn't for decades; it talks as if the reality is that a lot of businesses like retail and restaurant were hiring like crazy. The media, the markets, and the public pick up on this phony interpretation of reality and derive emotional juice about whether the economy is expanding, and whether now is the time to look for a job. In January, it was definitely a bad time to look for a job, unless you were looking for a mythical seasonally adjusted job. The phenomenon of course works in reverse - the BLS subtracts from the real numbers in November when Christmas hiring begins, so it understates the reality. The public has the common sense to know to look for jobs in November, even if they are only seasonal jobs, but reading this Friday's press statements (which the media usually regurgitate), everyone would think happy days are here again, and that is not exactly true. One person who probably likes the English used by the BLS is President Obama, which tells us that a government agency is certainly mindful of the interests of the politicians at the top. Also, the BLS report every month is considered the most important economic barometer by the financial markets. The BLS has no interest in undermining its own importance in the political and economic worlds by toning down the absurd way it presents its statistical conclusions.

2) So where did the 243,000 new jobs come from? From the seasonal adjustment factors derived solely by the BLS statisticians, and kept more secret "than the formula for Coca-Cola," as one economist described it. If the BLS went a few percentage points lower on the seasonal adjustment factor, hardly any jobs would have been "created" (ex post facto from the real world). A good explanation of the importance of the seasonal adjustment factor can be found here:

http://www.zerohedge.com/news/explaining-yesterdays-seasonally-adjusted-nonfarm-payroll-beat

3) The BLS uses something called the Household Survey to calculate the unemployment rate. This survey has been showing as many as 300,000 jobs a month being created since June of last year. The BLS doesn't like this survey as a descriptor of job creation, but this doesn't stop a lot of people from using these numbers to create a rosier picture of the economic landscape.

To report job gains and losses, the BLS prefers the Establishment Survey, which numbers of course then get seasonally adjusted. This survey has been showing far less job creation than the other survey, so if you want a gloomier picture of the economy you can use these numbers. A lot of observers who do this use the raw numbers when it suits them, perhaps not understanding the implications.

4) All of these numbers lead to a lot of confusion, but this month the confusion was royally compounded because the BLS recalculated its model assumptions on seasonal adjustments and other factors by incorporating labor market assumptions from the 2010 census, replacing the assumptions used during the past ten years from the 2000 census. Nobody knows outside of the BLS what the census modeling data details are, but now we have at least for this month some major modeling changes that are almost impossible to understand in lay terms.

5) The people I prefer to read when it comes to interpreting this mass of data are those who start from the raw numbers, look at averages of these numbers over time, and compare one month's number to the same month in previous years. This way they get a basic if crude seasonal adjustment of their own making, and they can spot important real trends in the labor market. One economist at JP Morgan Chase on Friday who takes this approach said the job creation number was essentially meaningless and an artifact of BLS statistical fiddling. Many of you probably read Karl Denninger's similar conclusions as well. He also highlighted the decline in the labor participation rate as a serious matter.

6) Which bring us to the demographic questions. The 2002 study Scotjen referenced is a good starting point. Clearly the retirement of the demographic bulge known as the baby boomers will tend to lower the participation rate. What I understand from these sort of studies, is that ceterus paribus, by 2020 demographics will push the participation rate down to the low 60% range. The problem is that we are already at the low 60s, eight years ahead of schedule. Anecdotally, what I can see from people my age around 60 is that a lot of baby boomers have taken early retirement, often forced upon them.

The BLS surveys indicate that baby boomers are staying longer in the work force and crowding out opportunities for the younger generations below them. The first statement is somewhat true, but the second is not. What I think has happened since 2005 or so has been significant churn in the labor market for people over 50. My own impression from the financial industry is that there has been a deliberate effort to squeeze out people over 50 because they are much more expensive, and becoming much more so the longer they stay employed. To avoid charges of ageism, corporations dress up these purges as cost-based exercises, which in truth they are, because the only way to cut significant personnel costs is to go after the more expensive employees, which means middle management aged 50 or more.

If these people who are let go are financially comfortable, they enter early retirement. Most, however, circle back into the labor force as consultants with no benefits, and therefore costing corporations far less. Many just work part-time, which depresses the labor participation rate which is based on full-time employment.

Now add to this the millions of people in their 20s, 30s, and 40s, who have been let go, and who can't get any employment, and you have a labor participation rate of 63.7%. Most everyone I know who is age 20-40 used to work in corporations and lost their job, or worked in trades like construction and lost their employment in the housing crash. Some remain unemployed with their benefits now running out. Others scrounge for what part-time work they can get. Of about 30 such people who came to the family Christmas party, I think only 5 work for a large corporation. Others work for local government, or services like dental clinics, one is an EMT, and one works for Wal-Mart. They are getting paid less than $20,000 a year in some cases, even though they are technically full time. My immediate brothers and sisters who are approaching retirement are doing so with very modest savings, and waiting for the day when they get on Medicare and Social Security. If they are lucky to get today's benefits under these programs, they will have to live watching every penny.

My own anecdotal experience may not translate to the broader economy, but interestingly, when I talk to people I've known over the years, or write something on the internet, I am surprised how frequently I hear the same description of the labor market from others - including people in the U.K, Spain, Australia, and so on.

Simply put, people are dropping out of full employment faster than demographics would predict because they are forced to by condition of the labor market. This is the discussion we really should be having in the financial markets, just like we should be reviewing the demographic studies from 2002 and earlier that predicted some of this. Moreover, as baby boomers enter retirement, the average person will have $10,000 worth of savings to keep them alive. They will therefore be on government support, at a time when Democrats and Republicans think it important to talk about the need to cut that government support. This is, after all, a basic campaign platform for Mitt Romney, who loves the safety net for poor people, but neglects to mention he wants to shred it, at a time when vast swathes of the labor market are being pushed into poverty.

When this depression is over, poverty may reach 50% of the population, and it will be concentrated among seniors. This is why I think ultimately this will be described as the Baby Boomer depression. They will bear the brunt of the pain, living their retirement in want, and sometimes facing starvation. They will do so quietly and out of sight, because that is the rugged American way. They may even still vote for Republicans who will continue to undermine the social safety net, but that is because we are all beholden to or victims of our tribal identity, often given to us by our parents and as ingrained as DNA. Fortunately, when it comes to politics, the tribal identities are breaking down as more people abandon the two traditional parties, seeking some alternative.

Finally, do not pay attention to the claims that baby boomers will have to work into their 70s. It looks so now, when the first wave of baby boomers are entering retirement, and they appear able to work that late in their life. The truth is that after 60 the body slows down, the mental faculties deteriorate, and energy lags. By 70, people will be able to handle only part-time and sedentary work, but the majority of them will be unable to work at all, plagued by various sicknesses. We'll see this all more clearly five years from now when the first wave of baby boomers gets to 70. By then, you will hear no more talk about working until death. You'll hear a bit more instead about poverty among the elderly, about hunger and lack of affordable housing, about most people running out of money, and about how some quietly take the route of suicide rather than remain a burden. Sounds depressing? That's why this will be known as the Baby Boomer depression.