Mish's Global Economic Trend Analysis

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• Startling Look at Employment Demographics by Age Group: Spotlight on Age 25-54
• Obama's Chance to Do Something Right: Nominate Hagel for Secretary of Defense; Why the War Party Fears Hagel
• The Bears' Prayer

Startling Look at Employment Demographics by Age Group: Spotlight on Age 25-54 Posted: 06 Jan 2013 10:28 PM PST Last month I posted a chart showing employment by age group. Here is an update as of Friday's job release. Employment Demographics by Age Group click on chart for sharper image Note that 100% of the job growth since the recession is in age group 55 and over. Last month, someone proposed the above chart was blatantly misleading because it does not reflect the aging workforce. Let's investigate that hypothesis with a look at actual data (numbers in tables and charts in thousands). Civilian Institutional Population (CP) and Labor Force (LF) Year 16-19 CP 20-24 CP 25-54 CP 55+ CP 16-19 LF 20-24 LF 25-54 LF 55+ LF 2000 15912 18311 120656 57697 8271 14250 101393 18668 2001 15929 18877 121604 58683 7902 14557 101789 19485 2002 15994 19348 122077 60151 7585 14781 101719 20778 2003 16096 19801 123289 61981 7170 14928 102309 22104 2004 16222 20197 123410 63527 7114 15154 102122 23011 2005 16398 20276 124175 65233 7164 15127 102773 24257 2006 16678 20265 124884 66988 7281 15113 103566 25468 2007 16982 20427 125696 68761 7012 15205 104353 26554 2008 17075 20409 125652 70652 6858 15174 104396 27858 2009 17043 20524 125565 72668 6390 14971 103742 29040 2010 16901 21047 125290 74591 5906 15028 102940 30014 2011 16774 21423 124704 76716 5727 15270 101744 30876 2012 16984 21799 124314 80187 5823 15462 101253 32437 Age Group 25-54 Key Facts In 2007 the civilian population was 125,652,000  In 2007 the labor force was 104,353,000 In 2012 the civilian population was 124,314,000 In 2012 the labor force was 101,253,000 Numbers are non-adjusted from BLS tables. Simply put, the decrease in civilian population in age group 25-54 was 1,340,000. The decrease in the labor force was a staggering 3,100,000! Let's explore this idea in still more detail looking at employment, unemployment, and non-employment. Spotlight on Age Group 25-54 Year 25-54 CP 25-54 LF 25-54 Employed 25-54 Not Employed 25-54 Unemployed 2000 120656 101393 98292 22364 3102 2001 121604 101789 97948 23656 3842 2002 122077 101719 96823 25254 4896 2003 123289 102309 97178 26111 5131 2004 123410 102122 97472 25938 4650 2005 124175 102773 98517 25658 4256 2006 124884 103566 99672 25212 3894 2007 125696 104353 100450 25246 3904 2008 125652 104396 99369 26283 5027 2009 125565 103742 95144 30421 8597 2010 125290 102940 94082 31208 8858 2011 124704 101744 93674 31030 8069 2012 124314 101253 94150 30164 7103 Notes Unemployment is the difference between employment and the labor force.  Not-employed is the difference between employment and the civilian population.  Numbers are non-adjusted from BLS tables.  There may be rounding errors. More Key Facts For Age Group 25-54 Between 2007 and 2012 the civilian population declined by 1,340,000 Between 2007 and 2012 the labor force declined by 3,100,000 Between 2007 and 2012 employment fell from 100,450,000 to 94,150,000. Between 2007 and 2012 employment declined by 6,300,000 jobs on a mere decrease in the civilian population of 1,340,000! Let's take a look at the above table in chart form. Civilian Population, Labor Force, Employed, Not-Employed  click on chart for sharper image Irrefutable Evidence Falling Employment Not Based on Boomer Demographics This plunge in employment in the prime working age group of 25-54 is irrefutable proof that the drop in employment and the falling participation rate is not based on aging boomer demographics. By calculation, 4,960,000 jobs (6,300,000 - 1,340,000) simply vanished into thin air (in age group 25-54 alone). Thus, the plunge in employment in the prime working age group of 25-54 also provides strong evidence the stated unemployment rate of 7.8% is bogus by a more sensible measure of unemployment. Better Measure of Unemployment I propose this simple definition: If you want a job, are physically able to work a job, and you don't have a job, then you are unemployed. Actual measures are purposely defined to hide the true state of the economy. For a close scrutiny of the latest jobs report, please see Establishment Survey +155,000 Jobs; Household Survey +28,000 Jobs; Unemployment Rate Revised Up, Flat Since September Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com "Wine Country" Economic Conference Hosted By Mish Click on Image to Learn More Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Obama's Chance to Do Something Right: Nominate Hagel for Secretary of Defense; Why the War Party Fears Hagel Posted: 06 Jan 2013 05:43 PM PST The Financial Time reports Hagel nomination expected this week. US President Barack Obama is poised to nominate Chuck Hagel as secretary of defence, setting the stage for a tough nomination fight focusing on the former Republican senator's views on Israel and Iran. The announcement by Mr Obama of a new Pentagon chief to replace Leon Panetta could come as early as Monday, administration officials indicated. Mr Obama returned from a holiday in Hawaii on Sunday. Mr Hagel's possible nomination has caused an uproar among neoconservatives over his questioning of sanctions and military action against Iran and his statement that a "Jewish lobby" intimidates Congress. Many Democrats have been unenthusiastic as well, because he is a Republican and over a past statement criticising a Clinton-era diplomatic appointment as "openly, aggressively gay". But the criticism has been especially virulent from the right, with Israel conservatives labelling him borderline anti-Semitic and suggesting he was intent in making dangerously deep cuts to the defence budget. Lindsey Graham, a Republican senator from South Carolina and a prominent defence hawk, said on Sunday he was inclined not to support his former Senate colleague because of his "antagonistic" attitude to Israel. "This is an in-your-face nomination by the president for all those who are supportive of Israel," Mr Graham told CNN. Got That? Democrats don't want Hagel simply because Hagel is a Republican. The Republicans do not want him because he is not a war-monger. That's what this whole thing boils down to. Why the War Party Fears Hagel Let's fill in the details with a look at Why the War Party Fears Hagel Who is Chuck Hagel? Born in North Platte, Neb., he was a squad leader in Vietnam, twice wounded, who came home to work in Ronald Reagan's 1980 campaign, was twice elected U.S. senator, and is chairman of the Atlantic Council and co-chair of the President's Foreign Intelligence Advisory Board. To The Weekly Standard's Bill Kristol, however, Hagel is a man "out on the fringes," who has a decade-long record of "hostility to Israel" and is "pro-appeasement-of-Iran." Hagel's enemies contend that his own words disqualify him. First, he told author Aaron David Miller that the "Jewish lobby intimidates a lot of people up there" on the Hill. Second, he urged us to talk to Hamas, Hezbollah, Iran. Third, Hagel said several years ago, "A military strike against Iran ... is not a viable, feasible, responsible option." Hagel has conceded he misspoke in using the phrase "Jewish lobby." But as for a pro-Israel lobby, its existence is the subject of books and countless articles. When AIPAC sends up to the Hill one of its scripted pro-Israel resolutions, it is whistled through. Hagel's problem: He did not treat these sacred texts with sufficient reverence. "I am a United States senator, not an Israeli senator," he told Miller. "I support Israel. But my first interest is I take an oath ... to the Constitution of the United States. Not to a president. Not to a party. Not to Israel. If I go run for Senate in Israel, I'll do that." Hagel puts U.S. national interests first. And sometimes those interests clash with the policies of the Israeli government. Chuck Hagel allies launch counter-attack Politico reports Chuck Hagel allies launch counter-attack. Brent Scowcroft, who was national security adviser to Presidents Gerald Ford and George H.W. Bush, said Hagel "has a very broad view of American foreign policy and the role in the world. He is very judicious, and he has an outstanding record as a senator, which gives him the knowledge and background to understand about the sometimes fractious relationship between the Congress, especially the Senate, and the administration." "He got two Purple Hearts on the front lines," Scowcroft added. "That's about the best recommendation you can get from somebody whose job would be to advise on the use of troops around the world. I am honestly surprised, even astonished, at the attacks. I do know where they're coming from, but I don't understand the genesis of them. Sen. Jack Reed (D-R.I.), a former Army Ranger who serves on the Armed Services Committee and has traveled to war zones with Hagel, said: "Every man and woman in uniform in the Pentagon and across the world will know that he's not only talked the talk, he's walked the walk. … He also has a successful business record. He is an entrepreneur who's succeeded. Zbigniew Brzezinski, national security adviser to President Jimmy Carter, forcefully defended Hagel on MSNBC's "Morning Joe": "Unlike some of his critics, … he has fought for his country. He has been wounded for this country. He is a man who knows what war is like." Nonviable Options I support anyone willing to make this statement "A military strike against Iran ... is not a viable, feasible, responsible option." vs. anyone not willing to make the same statement. A military strike on Iran would be idiotic, and I have no doubt one would have happened had Romney been elected. It remains to be see if Obama can get this right. However,  Hagel as Secretary of Defense would be a step in the right direction. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

The Bears' Prayer Posted: 06 Jan 2013 09:58 AM PST Given the Chicago Bears were put out of their misery last week, missing the playoffs I offer this prayer for 2013 Our Papabear Who art in heaven Hallas be thy name We're havin' no fun Cause we sure play dumb At home as we do away Give us this season Coach Lovie's Leavin' And forgive us you must As we forgive those, scoring big against us And lead us not into the playoffs But deliver us from Cutler Amen I wrote that in 1997 and only needed to change a few words. Back then it was Give us this season Dave Wanstedt's Leavin' In 1997 I ended with "deliver us from the Packers" Since Lovie is gone, part of the prayer has been realized already. Fans still await much needed delivery from Cutler. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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