Flash: 342,000 people disappear! -- 2

Earlier today I wrote about the huge number of people who supposedly left the labor force in April according to the latest government statistics. I have now had a bit more time to look at these numbers and I have to wonder where all these folks went. Certainly, the figures seem totally out of line.

From the start of the recession in January of 2008 until the end of 2011, the government says that the labor participation rate declined by 2%. This is a decline of 0.04% on average during those 48 months. Now we are told that in just April, the decline in the same statistic was 0.2% or five times higher than average. Absent the huge decline in the participation rate, unemployment would have risen rather than declining, so this change in the participation rate is not unimportant, to say the least.

The standard explanations of declining participation cannot help us here. Baby boomers are retiring; this may well be, but there is no reason why such a huge number would choose April of 2012 as the month to do so. Unemployment benefits are running out for some, but there is no reason why the folks in this category would soar in April. Indeed, for each of the reasons in the commonly expressed learning on this subject we find no help in explaining a huge surge in exits from the labor force.

Even more amazing is the actual number of people we are talking about. The figures above cover changes of the number of people in the labor force, but the government also discloses the number of folks who are not in the labor force. First some historical context: from April 2007 to April of 2009, the number of people no in the labor force went from 78.7 million to 80.5 million. So, during the recession, the number of folks not in the labor force went up by about 75,000 people per month. Some of this is growth in the population; some of it is due to the recession. But then the big moves start. During the last three years under Obama when the economy is supposed to be recovering, the number of folks not in the labor force went from 80.5 million to 88.4 million. This comes to 220,000 people per month or three times the rate of the prior two years.

Let me be clear about these numbers. They are the official numbers released by the Bureau of Labor Statistics; they are not interpreted or modified in any way. This is the pure truth according to the federal government.

Let's also be very clear about something else. There are people in the country who are not counted as being in the workforce since they have not looked for work during the four weeks before the monthly survey is taken. In a real recovery, one would expect to see the number of people outside the workforce decline. There should be more jobs and more chances to find work. All of those discouraged workers should be lured back into seeking gainful employment. But the numbers from the feds show exactly the opposite. Participation in the workforce is declining at an ever faster rate. These are the sorts of numbers one would expect to see during a severe recession or even a depression. But Obama tells us that this is a recovery.