The US Participation Rate Is At A 35 Year Low: This Is How It Looks Broken Down By State

After years of being roundly ignored by the mainstream media, and certainly by self-important economists, the issue of labor force participation is suddenly up front and center, especially now that the Fed itself finds itself scrambling to explain the humiliation of hitting its 6.5% unemployment "forward guidance" threshold without proceeding to tighten as it said it would initially when it launched QEternity in December 2012.

Incidentally, we predicted precisely this when we said in December 2012  that "using a simple forecast, based on LTM trends across all key employment metrics reveals something very troubling, for the Fed and stocks that is: the 6.5% unemployment rate will be breached in July 2013! Now granted that is simply idiotic, and there is no way that the US economy could possibly recover that fast, but that is precisely what is implied based on the ongoing collapse in the Labor Force Participation, and the concurrent plunge in the Labor Force Participation rate, which has been the biggest marginal driver for the unemployment rate, far more than the number of people who have jobs, or are unemployed (readers can recreate our calculation on their own in 10 minutes with excel)."

Granted, we were off by six months, but we were spot on about the reason why the unemployment threshold number was hit so quickly, instead of as the Fed has originally predicted, some time in 2015/2016.

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