Last June.

These millions, yes, millions (see: below), are being excluded from the official labor force therefore unemployment rate because they admit to the government’s data collectors they haven’t looked for work at any time during the last four weeks.

The simplest, most intuitive reason to explain why is that those keeping themselves out of the labor force – like in 2017-18 – understand the macro situation in a way that central bankers and Economists (therefore the media) refuse.

No. No. No, the media assured us. These weren’t really workers, they were lazy Americans sitting idle on government-funded vacations, fattened by extra-generous transfer receipts as well as unemployment benefits. And those who weren’t lazy had been parents stuck home babysitting their own children with so many schools shuttered by lawyers.

Everyone says the job market is somewhere between outright awesome and indescribably terrific.

That just so happens to have been September 2021; the same month when, as stated at the outset, the labor force dropped another nearly 200k. Maybe the employment situation – in reality – isn’t quite so rosy?

Before even pondering the possibility, the next benign “explanation” has already been cued up and readied for print: vaccine mandates (though it’s left intentionally unclear why being unable to meet these new corporate policies would convince so many of the formerly employed to exit the labor force entirely, but we’re not meant to think too hard on this stuff, just trust that the labor market is about to set inflationary fire to the economy).

These are the same two months, August now September, when the Establishment Survey underwhelmed, to put it kindly. Though the previous month, August, was revised up by more than a 100k, the net purported gain for headline payrolls even after is just 366,000; barely a decent number for pre-2020.

Therefore, this latest payroll gain for September, only 194,000, makes two in a row nowhere near that pace which was supposed to have convinced Federal Reserve policymakers to taper their (irrelevant) QE6.

Without the anticipated massive headline payroll gains each of the last two months, policymakers will simply fall back anyway to what’s always been their first love: the unemployment rate.

At just 4.8% for September, it again loves them equally since it gives officials an easy and relatable number to point to which they’ll say justifies tapering QE leading quickly thereafter to rate hikes. This low of a UE rate is supposed to be in the range of max employment therefore labor market tightness meaning inflation pressures.

You know, the very same argument the very same people all made using the very same suspect statistic just three years ago. In case anyone forgot, it didn’t work out the way anyone might’ve hoped then.

More importantly, confidence. If this stubbornly lower level of labor force participation really is due to the same conditions and problems as the last time, lack of sufficient economic recovery, then this effectively undercuts the entire idea and purpose of tapering QE; the Fed wants to project confidence in the labor situation and overall economy when the changes to the labor force itself allude to clear and serious doubts about those same things, and more than that discouraged workers are acting on those doubts as they drop out and continue to stay out.

A looming global slowdown, to start.

The US, in particular, had been juiced up to the max by government transfers, of several kinds including unemployment benefits. This merely created the illusion that the economy was on track to fully recover if not go further into inflation, real inflation, territory. Neo-Keynesians always, always assume government “stimulus” is effective and long-lasting, assigning each instance it is used a multiplier greater than one (sometimes far greater).

Another reason to deny labor force performance.

In terms of the labor force, especially those millions upon millions outside of it, there’s reopening and then there’s economic growth. These are two very different factors; one non-economic, the other highly macro. As we’ve been writing since the very first month of reopening, back in May 2020, the former has happened even as the latter continues to be absent.

The public has been confused and misled as reopening combined with, and coincident to, the government-fueled goods frenzy made a recovery appear plausible – even made it seem like it was already taking place – when the behavior of the labor force itself displayed this tremendous difference.

It truly is 2018 all over again. The unemployment rate will give Jay what he wants, everything else necessarily excluded. History repeats because hawks need to f(lie).