The booming non-labor force in the United States: Those not in the labor force surged by nearly 1,000,000. A large portion of added jobs were in low wage sectors.
Any job is a good job for the headlines. While one part of the BLS survey showed that US payrolls increased by 200,000 last month, another survey finds that nearly 1,000,000 Americans dropped out of the labor force. That is right, a stunning 932,000 Americans simply dropped out of the labor force last month bringing our labor force participation rate to a new 35 year low. More importantly, a large part of those200,000 added jobs were in the form of low wage retail and food sector jobs. For the headlines anything is good news and the stock market continues to rally (even though most Americans don’t even own stocks because they are too broke once all bills are paid). The drop in the labor force participation rate was not unforeseen but the current rate of growth is very troubling. Of course, the Fed now “hints†at tapering but the evidence shows that the Fed is in soft default mode. We have a boom in the non-labor force segment of our economy.
Arrested economic development: 36 percent of Millennials living at home delaying financial adulthood. Less than one-third of Millennials employed.
Young Americans are living at home in record numbers. Millennials are living at home for much longer because of the poor economic conditions for the young. Think about the perfect storm of financial pain for young Americans. College costs are astronomical and many are going into massive debt to pursue a college education. If not, then it is very likely that you’ll end up in one of the top low paying jobs since we have decimated our manufacturing sector. Next, because of low earnings, the median net worth of those 25 to 34 is zero dollars. Do you have one dollar in your bank account and no debt? Congrats. You are wealthier than most young Americans. A recent research report from Pew Research Center indicates this trend is still going on. Many young Americans are delaying the biggest payment of being an adult, that of paying rent or a mortgage. A stunning 36 percent of Millennials live at home.
US households cannot avoid soft default consequences of deleveraging: While US households continue to unwind debt total public debt soars out of control.
The US is walking in a financial minefield. The recent government shutdown simply highlighted the mega dysfunction in our Congress run by millionaires. The government is in a deep capture by large financial interests. The IMF now has an indicator looking at household debt measured against GDP. Since the recession, US households have undergone a painful deleveraging. The number of people on food stamps doubled from 23 million to over 47 million where it still stands today. This isn’t exactly a common recovery. Unfortunately it costs money to get your message out and those facing the pangs of the soft default have no media microphone. The press continues to march on as the debt machinery is back in operation but we are simply setting up the platform for the next major financial crisis.
What is the Federal Reserve’s end goal? Follow the money and you will find no intention of tapering, out of control public debt, and financial steroids for stocks. Fed balance sheet up $55 billion in one week.
The Federal Reserve is known for producing convoluted and purposely hard to decipher messages. The media is driven by what the Federal Reserve says but fails to analyze what is truly happening. The Fed is driving in a car with no brakes. This is clear given that the Fed balance sheet increased by $55 billion in one week (or a rate of $220 billion in one month). Not only is the Fed not tapering but it appears to be accelerating Quantitative Easing. Follow the money and you are led down a path of no return. The Fed is juicing the stock markets and is perfectly fine with Wall Street creating another real estate bubble. Many poor and working class Americans are still deep in what appears to be a recession. Those with the ability to access the digital capital of the Fed are given an opportunity to gamble and speculate while low wage capitalism engulfs the middle class. What is the end goal for the Federal Reserve?