SOTT Exclusive: Inside the April 5.4% unemployment rate

© Reuters/Brendan McDermid

    

Wall Street is jubilant today as the April unemployment rate dropped to 5.4%. As reported by Reuters:

Wall St. opens sharply higher after strong jobs data:

U.S. stocks rose sharply on Friday after data showed U.S. job growth rebounded and the unemployment rate dropped last month, signs of a pickup in the economy that could keep the Federal Reserve on track to hike interest rates this year.

Nonfarm payrolls increased by 223,000 in April, just below the 224,000 that economists polled by Reuters had expected.

The unemployment rate dropped from 5.5 percent to 5.4 percent, its lowest level since May 2008, despite an increase in the number of people entering the labor market.

The drop in the unemployment rate pushed it to within a whisker of the 5.0 percent to 5.2 percent range that most Fed officials consider consistent with full employment.

"I think this is exactly what the market was looking for. It's a Goldilocks number - not too strong, not too weak," said Adam Sarhan, chief executive of Sarhan Capital in New York.

March payrolls were revised to show only 85,000 jobs created, the smallest since June 2012.

Still, the solid report suggested underlying strength in the economy at the start of the second quarter after growth hit a soft patch in the first.

Such wonderful news right?

Well, let's take a peak at the report:

Americans Not In The Labor Force Rise To Record 93,194,000

In what was an "unambiguously" unpleasant April jobs payrolls report, with a March revision dragging that month's job gain to the lowest level since June of 2012, the fact that the number of Americans not in the labor force rose once again, this time to 93,194K from 93,175K, with the result being a participation rate of 69.45 or just above the lowest percentage since 1977, will merely catalyze even more upside to the so called "market" which continues to reflect nothing but central bank liquidity, and thus - the accelerating deterioration of the broader economy.

    

That doesn't look like good news to me. But then again, fewer people chasing fewer jobs.

So who are getting the new jobs?

Old Workers Hit New All Time High As All April Jobs Go To The "55 And Older"

Earlier we reported that all the jobs added in April were part-time, or over 400,000, while full-time jobs decreased by over 200,000 pushing them further under the pre-recession peak. Here is another stunning data point: while it has been no secret that ever since the quote-unquote recovery virtually all job gains have gone to older workers, those 55 and over and ever closer to retirement, April merely confirmed this demographically disastrous trend, and of the 255K workers added in the household survey when broken down by age group, more than all, or 266K went to workers aged 55 and older also known as the age cohort which is realizing it is never going to retire under the Fed's centrally-planned regime.

    

And while the old workers rose to a new all time high of 33.379 million workers...

    

Working Americans in their prime career years, those aged 25-54 once again declined, this time by 19,000 in the month of April. And, as the next chart shows, just like full-time jobs have been unable to rise above the last-recession highs, so the number of workers aged 25-54 are now 4 million below the prior peak.

    

Just wonderful! Retirees have to jump back into the labor market since they can no longer rely on their retirement and savings thanks the the Fed's low interest rate policy.

What kind of jobs are these 55-and-over aged workers getting?

Part-Time Jobs Soar By 437,000; Full-Time Jobs Tumble, Stay Firmly Under Pre-Recession Highs

For all the talk about a jobs recovery and about a US economy that has put the great financial crisis and recession of 2007/8 in the rear view mirror, don't tell it to those workers who desire a full-time job and instead are forced to settle with measly part-time offerings (mostly courtesy of Obamacare). Because as the chart below shows, as of April 2015, the number of full-time jobs remained well below the pre-recession peak, which incidentally was hit on December 2007, the month the last recession officially started.

    

We bring this up because in April, while the establishment survey reported a number that was just below the consensus estimate (even if it revised the March number lower by 50%), the household survey painted a far less optimistic picture, with the number of part-time jobs surging by nearly half a million, the worst print since last June, while the number of full-time jobs tumbled by 252K, also the biggest drop in nearly a year.

    

So let me get this straight: with dwindling numbers of workers participating in the workforce coupled with older workers grabbing most of the part-time jobs out there, we are supposed to believe the mainstream news that this is the underlying strength of the US economy?

Wow, I'm so excited! And to think I was being so pessimistic.

Congrats to the 55-and-up folks working part-time to hold up the economy while the rest of us sit back and enjoy the ride.

I guess I will just move along and get back to my regularly scheduled TV program.

William Barbe

William joined the SOTT news team in 2014. A 30-year veteran of the semiconductor industry, in 2007 he began being interested and paying more attention to world events and living a healthier lifestyle. Hobbies and interests include hiking, photography and reading non-fiction books on history, economics, psychology, science, unexplained anomalies and politics.

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