As is typical, Wall Street and the media are celebrating a jobs report that is not nearly as positive as the headlines suggest. The continuing decline in the labor force participation rate was at least as important a factor as the new jobs created in bringing down the official unemployment rate to 7.7%.
The participation rate has now dropped to 63.5%, the lowest level since 1981 when the rate had plunged due to a terrible recession. It is important to realize that at that time women had not fully entered the labor force.
Prior to that, a single income was sufficient to support most families. When incomes fell, and living costs rose in the 1970s and 1980s, American women were able to enter the labor force and find employment. That is no longer an option. So the only factors that are now helping families make ends meet are low interest rates, debt accumulation, declining savings, rising home prices, and government transfer payments.
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Peter Schiff is a well-known commentator appearing regularly on CNBC, TechTicker and FoxNews. He is often referred to as "Doctor Doom" because of his bearish outlook on the economy and the U.S. Dollar in particular. Peter was one of the first from within the professional investment field to call the housing market a bubble. Peter has written a book called "Crash Proof" and a follow-on called "The Little Book of Bull Moves in Bear Markets". He is the President of EuroPacific Capital, which is a brokerage specializing in finding dividend-yielding, value-based foreign stocks.
