No, The Jobs Picture is Not Improving

The headline unemployment rate keeps going down and most mainstream media outlets are starting to trumpet an improved outlook for the economy.

They are wrong.

The following shows the employment ratio or the percent of civilians working. It cratered to around 58.5% during the official recession and has remained there ever since.

Workers are dropping out of the labor force and not actively looking for another job leading to lower headline unemployment numbers.

Keep in mind that consumer spending accounts for about 70% of the economy and you can see why we continue to remain bearish. People without jobs don’t spend.

The continued fiscal support from the 8% to 10% budget deficits is enough for about another year of 2% GDP growth and decent corporate profits.