<p><div class="KonaFilter image-container float_right"><div class="image"><img src="http://static1.businessinsider.com/image/52d05d4feab8ead971f52b4f-1200-924/lemurs.jpg?maxX=480" border="0" alt="lemurs" width="480" /><p class="source"><span>REUTERS/Olivia Harris</span></p><p class="caption">Eesh.</p></div><p></p></div>The U.S. economy added a measly 74,000 jobs in December.</p>
<p>First, the scoreboard:</p>
<ul>
<li><strong>Dow:</strong> 16,424.24 (-20.0, -0.1%)<br /><strong></strong></li>
<li><strong>S&amp;P 500:</strong> 1,841.0 (+2.9, +0.1%)</li>
<li><strong>Nasdaq:</strong> 4,170.9 (+14.7, +0.3%)</li>
</ul>
<p>And now the top stories:</p>
<ul>
<li>U.S. <a href="http://www.businessinsider.com/the-december-jobs-report-2014-1">nonfarm payrolls increased by just 74,000</a> in December, missing economists' expectation for a gain of 197,000. More Americans drop out of the workforce, causing the labor force participation rate (LFPR) to decline to 62.8% from 63.0%. The unemployment rate fell to 6.7% from 7.0% in November, but this was largely due to the shrinking LFPR.</li>
<li>One of the major forces behind the disppointing report was the unusually cold weather. According to the Bureau of Labor Statistics, <a href="http://www.businessinsider.com/weather-impact-on-december-jobs-report-2014-1">around 273,000 people weren't able to work</a> due to weather. Weather hadn't had this big of an impact on jobs since December 1977.  Most economists agree that this is just a temporary phenomenon, not reflective of a more serious underlying economic problem.</li>
<li>President Obama will nominate <a href="http://www.businessinsider.com/obama-to-nominate-fischer-to-fed-today-2014-1">Stanley Fischer, Lael Brainerd, and Jerome Powell</a> to the Federal Reserve. Fischer will fill the vice chair position vacated by Janet Yellen. There are no big surprises here. For the most part, experts are thrilled to hear about Fischer's nomination. Morgan Stanley's Vincent Reinhart previously said that a Yellen-Fischer Fed would make for a <a href="http://www.businessinsider.com/stanley-fischer-resume-and-achievements-2014-1">monetary policy "dream team."</a></li>
<li>Sears Holdings got crushed today. On Thursday afternoon, the <a href="http://www.businessinsider.com/sears-crashing-2014-1">retailer warned</a> that it would report a Q4 net loss of $2.01-$2.98 per share. Analysts had been expected a $0.26 per share profit.  Management also warned that its quarter-to-date comparable store sales tumbled 7.4%.</li>
<li><strong>Don't Miss:<span class="title"> </span><a href="http://www.businessinsider.com/goldman-sachs-40-stocks-to-own-in-new-year-2014-1" class="title">GOLDMAN: Here Are 40 Great Comeback Stocks For 2014 »</a></strong></li>
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STOCKS END HIGHER AFTER LOUSY JOBS REPORT: Here's What You Need To Know

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5454fec0eab8ea9d13adf120-1025-769/jan-hatzius-10.png" alt="Jan Hatzius" border="0"><p class="source"><span><a href="http://t.co/WwYV4hZ5Zf">Goldman Sachs</a></span></p><p class="caption">Jan Hatzius</p></img></div><p></p></div></div>On Wednesday, the Federal Reserve finally <a href="http://www.businessinsider.com/fomc-monetary-policy-announcement-oct-29-2014-10">ended quantitative easing</a>, one its extraordinary monetary policy measures aimed at stimulating the economy.</p>
<p>It was confirmation that the days of the financial crisis are behind us and that the US economy is returning to normal.</p>
<p>"Labor market conditions improved somewhat further, with solid job gains and a lower unemployment rate," the Fed said in its <a href="http://www.businessinsider.com/fomc-monetary-policy-announcement-oct-29-2014-10">FOMC statement on Wednesday</a>. "On balance, a range of labor market indicators suggests that underutilization of labor resources is gradually diminishing."</p>
<p>Fed-watchers noticed a word was missing from this characterization of the labor market. Here's what the <a href="http://www.businessinsider.com/fomc-statement-september-17-2014-9">FOMC statement read back back in September</a>:</p>
<p style="padding-left: 30px;">"...On balance, labor market conditions improved somewhat further; however, the unemployment rate is little changed and a range of labor market indicators suggests that there remains <span style="color: #ff0000;"><strong>significant</strong> </span>underutilization of labor resources..."</p>
<p>The exclusion of the word "significant" was no accident, and for monetary policy experts it was a signal that the labor market has improved so much that an <a href="http://www.businessinsider.com/chris-rupkey-sees-early-rate-hikes-2014-10">initial interest rate hike would come sooner than later</a>. Currently, most economists believe will come in mid-2015 give or take a few months.</p>
<p>"[W]e disagree with the committee's view on labor market slack," Goldman Sachs' Jan Hatzius wrote in a note to clients. "While the <a href="http://www.businessinsider.com/september-jobs-report-october-3-2014-10">unemployment rate is now below 6%</a> and the explicit phrase in the FOMC statement that "...underutilization of labor resources is gradually diminishing..." is factually correct, the implicit notion that underutilization is no longer "significant"-the term used in the July and September statement-looks inconsistent with the employment and wage data."</p>
<p>In his argument, Hatzius highlighted two labor market indicators: the labor force participation rate (LFPR) and the rate of involuntary part-time employment.</p>
<p><span style="text-decoration: underline;">Here he is on the low LFPR</span>: "Exhibit 2 shows our updated summary of recent studies that attempt to split the drop in the labor force participation rate since 2007 into structural and cyclical factors. The median study finds that structural forces have lowered participation by 1.6 percentage points and cyclical forces have contributed another 1.1 percentage points.2 When translated from a share of the over-16 population to a share of the labor force, this 1.1-point number is equivalent to about 1.6 percentage points. Even if we assume that the gap has shrunk a bit since the publication of the median study in the table, the results suggest that <strong>depressed labor force participation remains a very important factor in evaluating slack</strong>."</p>
<p><div class="KonaFilter image-container display-table click-to-enlarge"><div><div class="image"><a title_source="Goldman Sachs Investment Research" title_caption="" class="zoomin" href="https://static-ssl.businessinsider.com/image/54550196ecad042c7014105c-960/screen shot 2014-11-01 at 11.51.18 am.png"><span class="sprites click-to-enlarge-icon" title="Click to enlarge"></span><img src="https://static-ssl.businessinsider.com/image/54550196ecad042c7014105c-996-581/screen shot 2014-11-01 at 11.51.18 am.png" alt="lfpr" border="0" /></a><p class="source"><span>Goldman Sachs Investment Research</span></p></div><p></p></div></div></p>
<p><span style="text-decoration: underline;">Here's he is on the elevated level of involuntary part-time employment</span>: "Exhibit 3 shows that the share of workers who report themselves part-time employed for economic reasons, either because their hours were cut back by their employer or because they could only find part-time work. This share remains about 1 1/2 percentage points above the pre-crisis norm. This is equivalent to an additional 3/4 percentage point when translated into full-time equivalent hours, recognizing that part-timers average about half the hours of full-timers."</p>
<p><div class="KonaFilter image-container display-table click-to-enlarge"><div><div class="image"><a title_source="Department of Labor via Goldman Sachs Investment Research" title_caption="" class="zoomin" href="https://static-ssl.businessinsider.com/image/545501feecad041870141061-960/screen shot 2014-11-01 at 11.53.00 am.png"><span class="sprites click-to-enlarge-icon" title="Click to enlarge"></span><img src="https://static-ssl.businessinsider.com/image/545501feecad041870141061-998-525/screen shot 2014-11-01 at 11.53.00 am.png" alt="pt unemployment" border="0" /></a><p class="source"><span>Department of Labor via Goldman Sachs Investment Research</span></p></div><p></p></div></div></p>
<p>This slack in the labor market would explain the persistently low rate of wage growth.</p>
<p>"Partly for this reason, we expect core PCE inflation to remain at 1 1/2% in 2015, which we think would be enough to push the first hike into September 2015," Hatzius wrote.</p>
<p>Hatzius sees scenarios in which a rate hike could come as soon as Q1 2015 or as late as some time in 2016. It's not until early to mid-2016 when Hatzius sees labor market slack actually disappearing.</p>

GOLDMAN: We Disagree With The Fed

<p>The <a href="http://www.businessinsider.com/january-jobs-report-2014-2">U.S. unemployment rate</a> has <a href="http://www.businessinsider.com/unemployment-falling-too-fast-2014-2">fallen sharply</a> since the darkest days of the great recession.</p>
<p>Much of this decline is due to the drop in the <a href="http://www.businessinsider.com/baby-boomers-are-retiring-2014-2">labor force participation rate (LFPR)</a>.</p>
<p>Some people have attributed the change to discouraged workers. Others have pointed to young people going back to school. Many have recognized that many baby boomers are retiring.</p>
<p><a href="https://twitter.com/georgemagnus1/status/438695780371927040">Earlier this week</a>, Business Insider's Matthew Boesler brought light to some underappreciated stats <a href="http://www.businessinsider.com/baby-boomers-are-retiring-2014-2">from the Census</a> that actually quantify this.  "The monthly Current Population Survey conducted by the <span>U.S. Census Bureau and the U.S. Bureau of Labor Statistics (from which labor force participation data are derived) actually asks those leaving the labor force why they are doing so."<br /></span></p>
<p><span><span>And <a href="https://twitter.com/palmerandrew/status/438693440021200896">more</a> and <a href="https://twitter.com/TheStalwart/status/438716866337705984">more</a> people are talking about it.</span></span></p>
<p><span>The numbers broke down the 12.6 million people who left the workforce since 2007 into five broad categories. According to the respondents, 5.5 million retired, 2.9 million went on disability, 2.5 million went to school, and just 1.4 million left because they were discouraged.<br /></span></p>
<p><span>Here's Deutsche Bank's pie chart.<br /></span></p>
<p><span><div class="KonaFilter image-container display-table"><div><div class="image"><img src="http://static6.businessinsider.com/image/530e36f969bedd7c66b68e17-1119-800/bhanxaicaaeh5wg.jpg_large.jpg" border="0" alt="labor force" /><p class="source"><span>Deustche Bank</span></p></div><p></p></div></div><br /></span></p>

Why 12.7 Million Americans Dropped Out Of The Workforce

<p><div class="KonaFilter image-container float_right click-to-enlarge"><div class="image"><a title_source="Business Insider/Matthew Boesler (data from St. Louis Fed)" title_caption="Chart 1." class="zoomin" href="http://static1.businessinsider.com/image/530aaeb369bedd133d2c6d22-960/lfpr-55-and-over.png"><span class="sprites click-to-enlarge-icon" title="Click to enlarge"></span><img src="http://static1.businessinsider.com/image/530aaeb369bedd133d2c6d22-1200-924/lfpr-55-and-over.png?maxX=480" border="0" alt="55+ LFPR" width="480" /></a><p class="source"><span>Business Insider/Matthew Boesler (data from St. Louis Fed)</span></p><p class="caption">Chart 1.</p></div><p></p></div>At 39.8%, the labor force participation rate for those 55 years of age and over is the lowest it's been since April 2009 (chart 1).</p>
<p>Millions of "baby boomers" - a generation typically defined as those born during the post-war baby boom that took place between 1946 and 1964 - have retired from the workforce over the past six years.</p>
<p>This is putting massive downward pressure on the total labor force participation rate, which currently stands at 63.0% (chart 2).</p>
<p><div class="KonaFilter image-container float_right click-to-enlarge"><div class="image"><a title_source="Business Insider/Matthew Boesler (data from St. Louis Fed)" title_caption="Chart 2." class="zoomin" href="http://static4.businessinsider.com/image/530ab575eab8ea5564e23232-960/lfpr-1.png"><span class="sprites click-to-enlarge-icon" title="Click to enlarge"></span><img src="http://static4.businessinsider.com/image/530ab575eab8ea5564e23232-1200-924/lfpr-1.png" border="0" alt="LFPR" width="480" /></a><p class="source"><span>Business Insider/Matthew Boesler (data from St. Louis Fed)</span></p><p class="caption">Chart 2.</p></div><p></p></div>Of course, the labor force participation rate for those 55 years of age and over has only been falling for the last year, whereas the total labor force participation rate has been falling for over five years.</p>
<p>This has led to some confusion.</p>
<p>How can retiring baby boomers be the primary driver of the drop in labor force participation if the participation rate for those 55 years of age and over has been mostly <em>increasing</em> in recent years as the total labor force participation rate has fallen?</p>
<p><div class="KonaFilter image-container float_right click-to-enlarge"><div class="image"><a title_source="Business Insider/Matthew Boesler (data from St. Louis Fed)" title_caption="Chart 3." class="zoomin" href="http://static4.businessinsider.com/image/530accddeab8eade36e23233-960/lfprs.png"><span class="sprites click-to-enlarge-icon" title="Click to enlarge"></span><img src="http://static4.businessinsider.com/image/530accddeab8eade36e23233-1200-924/lfprs.png" border="0" alt="LFPRs" width="480" /></a><p class="source"><span>Business Insider/Matthew Boesler (data from St. Louis Fed)</span></p><p class="caption">Chart 3.</p></div><p></p></div>It's important to remember that, at 39.8%, the participation rate for those 55 years of age and over is still a massive 41.1 percentage points lower than the prime working age (25-54) participation rate, which currently stands at 80.9% (chart 3).</p>
<p>Millions of Americans have been transitioning from the first bucket (25-54) to the second one (55+) over the past several years as the baby boom generation comes of retirement age.</p>
<p><div class="KonaFilter image-container float_right click-to-enlarge"><div class="image"><a title_source="Business Insider/Matthew Boesler (data from St. Louis Fed)" title_caption="Chart 4." class="zoomin" href="http://static3.businessinsider.com/image/530ac84269bedddf162c6d26-960/population-growth-1.png"><span class="sprites click-to-enlarge-icon" title="Click to enlarge"></span><img src="http://static3.businessinsider.com/image/530ac84269bedddf162c6d26-1200-924/population-growth-1.png" border="0" alt="Population growth" width="480" /></a><p class="source"><span>Business Insider/Matthew Boesler (data from St. Louis Fed)</span></p><p class="caption">Chart 4.</p></div><p></p></div>Since 2007, the prime working age population has fallen by 1.556 million, or 1.2%, whereas the 55-and-over population has risen by 14.063 million, a 20.2% increase <span>(chart 4)</span>.</p>
<p>Some quick arithmetic shows the effect this has had on overall labor force participation:</p>
<ul>
<li>The average prime working age LFPR since 2007 is 82.0%, and the average 55-and-over LFPR since 2007 is 40.1%</li>
<li>The size of the 55-and-over population has increased by 15.619 million relative to that of the prime working age population since 2007</li>
<li>15.619 million multiplied by the difference between the two participation rates (82.0% - 40.1%) implies that this simple demographic shift alone has caused the labor force to shrink by 6.544 million since 2007</li>
</ul>
<p>Don't take it from us, though - take it from the retiring boomers themselves.</p>
<p>The monthly Current Population Survey conducted by the <span>U.S. Census Bureau and the U.S. Bureau of Labor Statistics (from which labor force participation data are derived) actually asks those leaving the labor force why they are doing so.</span></p>
<p>In a <a href="http://macroblog.typepad.com/macroblog/2014/01/what-accounts-for-the-decrease-in-the-labor-force-participation-rate.html">recent article</a>, Ellyn Terry, an economic policy analysis specialist in the research department of the Atlanta Fed, broke down the numbers.</p>
<p><span>"In total, the number of people not in the labor force rose by 12.6 million (16 percent) from the fourth quarter of 2007 to the fourth quarter of 2013," wrote Terry.</span></p>
<p><span style="line-height: 1.5em;"><div class="KonaFilter image-container float_right click-to-enlarge"><div class="image"><a title_source="Business Insider/Matthew Boesler (data from Atlanta Fed, courtesy of Ellyn Terry)" title_caption="Why people have left the labor force." class="zoomin" href="http://static1.businessinsider.com/image/530ad2db6bb3f7243fe23236-960/left-labor-force-1.png"><span class="sprites click-to-enlarge-icon" title="Click to enlarge"></span><img src="http://static1.businessinsider.com/image/530ad2db6bb3f7243fe23236-1200-924/left-labor-force-1.png" border="0" alt="Why people have left the labor force" width="480" /></a><p class="source"><span>Business Insider/Matthew Boesler (data from Atlanta Fed, courtesy of Ellyn Terry)</span></p><p class="caption">Why people have left the labor force.</p></div><p></p></div>"</span><strong style="line-height: 1.5em;">About 5.5 million more people (a 16% increase) are retired,</strong><span style="line-height: 1.5em;"> 2.9 million (a 23% increase) are disabled or ill, and 2.5 million (a 19% increase) are in school. An additional 161,000 are taking care of their family or house, and an additional 99,000 are not in the labor force for other reasons. The fraction who say they want a job has risen the most (32%) but has contributed only 11% to the total change."</span></p>
<p><span>Dividing 5.5 million by 12.6 million suggests around 44% of the drop in labor force participation since 2007 is retiring workers. Add the 2.3 million workers over the age of 50 who have left the workforce because of disability in that time period and the numbers suggest closer to 62% of the drop in labor force participation over the last six years can be attributed to an aging population.</span></p>
<p><span>The 2.5 million people who have left the workforce in the past six years to go back to school, meanwhile, account for another 20% of the drop in participation, and discouraged workers - those who have left the labor force because they couldn't find a job - only account for 11% of the decline, as Terry notes.</span></p>
<p><span>Chart 6 zooms out a bit to make the simple point that America is getting older, a trend that will undoubtedly continue to have a profound impact on the labor market going forward.</span></p>
<p><span><div class="KonaFilter image-container click-to-enlarge"><div class="image"><a title_source="Business Insider/Matthew Boesler (data from St. Louis Fed)" title_caption="Chart 6." class="zoomin" href="http://static2.businessinsider.com/image/530ad5c76bb3f7fe4de23232-960/population-2.png"><span class="sprites click-to-enlarge-icon" title="Click to enlarge"></span><img src="http://static2.businessinsider.com/image/530ad5c76bb3f7fe4de23232-1200-706/population-2.png" border="0" alt="Population" width="800" /></a><p class="source"><span>Business Insider/Matthew Boesler (data from St. Louis Fed)</span></p><p class="caption">Chart 6.</p></div><p></p></div><br /></span></p>

Everyone Who Is Debating The State Of The Labor Force Must Understand What's Happening With Baby Boomers

<p><div class="image-container float_right" style="width:400px"><div class="image"><img src="http://static1.businessinsider.com/image/50380ef46bb3f7105500001c-590-443/matus.jpg?maxX=400" border="0" alt="drew matus" width="400" /></div><p class="source"><a href="http://www.businessweek.com/videos/2012-06-19/fed-easing-wouldnt-do-much-ubss-matus-says">Bloomberg</a></p><p class="caption">Drew Matus, UBS</p></div>The <keyword id="990594" type="UNKNOWN" weightage="60" keywordseo="labor-force">labor force</keyword> participation rate <a href="http://www.businessinsider.com/march-labor-force-participation-rate-2013-4">fell to 63.3 percent in March</a>.  This is the lowest level since 1979.</p>
<p>Many are quick to attribute this falling rate due to workers leaving the labor force because they're so discouraged by the poor job market.</p>
<p>But this is only a small part of the story.</p>
<p>UBS's Drew Matus argues that this dropping participation rate is largely due to shifting American population dynamics.  Specifically, we're running out of workers.</p>
<p>Matus is re-circulating a report he published in January.</p>
<p style="padding-left: 30px;">... In 2012 the participation rate declined from 64.1 percent to 63.7 percent. This decline was the result of a decline in the prime working age (aged 25-54 years) population that was only partially offset by rising participation among older workers (aged 55 years and over). These movements are a continuation of labor force developments that have been underway since the financial crisis. Even if there is a moderate rebound in participation among prime working age workers, it seems possible that, given population trends, the labor force participation rate will remain close to 63.7 percent.</p>
<p style="padding-left: 30px;">An increase in the number of discouraged workers is only a minor factor in the decline in the LFPR. In 2012 there were 909,000 discouraged workers, about 420,000 more than normal relative to the size of the population. Returning these “workers" back into the labor force would only boost the participation rate by 0.17pp, to 63.8 percent (the unemployment rate would increase by 0.25pp, to 8.1 percent).</p>
<p>"All else being equal, a lower participation rate lowers the 'break even' rate of employment growth — the number of new <keyword id="11018" type="COMPANY" weightage="60" keywordseo="Jobs">jobs</keyword> that must be created to hold the unemployment rate constant," wrote Matus.</p>
<p><table class="image-container" width="200"><tr><td><div class="image"><img src="http://static2.businessinsider.com/image/515eceddeab8ea7029000000-402-233/screen shot 2013-04-05 at 9.16.45 am.png" border="0" alt="labor force participation rate" /></div><p class="source">UBS</p></td></tr></table></p>
<p><br /><a href="http://www.businessinsider.com/the-march-jobs-report-2013-4"><strong>For more on today's jobs report, see here &gt;</strong></a></p>

Many People Have The Labor Force Participation Rate Story All Wrong

<p><div class="image-container float_right" style="width:307px"><div class="image"><img src="http://static5.businessinsider.com/image/4f05dcf8ecad04915a000029-400-300/uglythumb.jpg?maxX=307&amp;maxY=230" border="0" alt="ugly thumb art" width="307" height="230" /></div><p class="source"><a href="http://www.travelandleisure.com/articles/worlds-ugliest-public-art">Travel + Leisure/Dariusz Czumaj</a></p></div>Stocks tanked early in the trading session after a disappointing jobs report.  The Dow was down as much as 170 points. But they slashed those losses.</p>
<p>First the scoreboard:</p>
<p>Dow: 14,565, -40.8 pts, -0.2 percent<br />S&amp;P 500: 1,553, -6.7 pts, -0.4 percent<br />NASDAQ: 3,203, -21.1 pts, -0.6 percent</p>
<p>And now the top stories:</p>
<ul>
<li>U.S. companies added only <a href="http://www.businessinsider.com/the-march-jobs-report-2013-4">88k jobs in March</a>.  This was a lot lower than the 190k economists were looking for.  <a href="http://www.businessinsider.com/retail-jobs-fall-2013-4">Retail sector jobs</a> actually plunged by 24k, which is particularly worrisome.  This could be a sign that the recent payroll tax hike and all of the uncertainty coming out of Washington is starting to hit the consumer.  <a href="http://www.businessinsider.com/biggest-mass-layoff-announcements-2013-4">Here Are The 18 Biggest Mass Layoff Announcements Of The Last Year &gt;</a></li>
<li>The jobs report challenged two big U.S. economic stories: the energy boom and the manufacturing renaissance.  After 27 straight months of growth, <a href="http://www.businessinsider.com/oil-and-gas-jobs-fall-in-march-2013-4">oil and gas extraction</a> industry payrolls actually fell.  The manufacturing sector lost 3,000 payrolls. On a percentage basis, the rate of <a href="http://www.businessinsider.com/us-manufacturin-jobs-are-falling-2013-4">manufacturing sector payroll growth</a> has been decelerating more than average.</li>
<li>The unemployment rate unexpectedly fell to 7.6 percent from 7.7 percent.  But it fell because the <a href="http://www.businessinsider.com/march-labor-force-participation-rate-2013-4">labor force participation rate fell to 63.3 percent</a>, the lowest level since 1979.  Some of this is likely due to discouraged workers who fell out after been turned off by the poor job market.</li>
<li>However, UBS's Drew Matus notes that the participation rate move is actually <a href="http://www.businessinsider.com/why-the-labor-force-participation-rate-falls-2013-4">due to demographics, not discouragement</a>. From a note he circulated: "In 2012 the participation rate declined from 64.1 percent to 63.7 percent. This decline was the result of a decline in the prime working age (aged 25–54 years) population that was only partially offset by rising participation among older workers (aged 55 years and over). These movements are a continuation of labor force developments that have been underway since the financial crisis ... An increase in the number of discouraged workers is only a minor factor in the decline in the LFPR."</li>
<li><strong><strong>D</strong>on't Miss:</strong> <a href="http://www.businessinsider.com/las-vegas-most-exuberant-housing-market-2013-3"><strong>Inside The US Housing Market That Robert Shiller Is Already Calling 'Exuberant' &gt;</strong></a></li>
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STOCKS MAKE STUNNING COMEBACK AFTER UGLY JOBS REPORT: Here's What You Need To Know

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image"><img src="https://static-ssl.businessinsider.com/image/5363fdde69beddea0356ff28-773-580/estonia-bog-lake-landscape-1.jpg" border="0" alt="estonia bog lake landscape" /><p class="source"><span><a href="http://commons.wikimedia.org/wiki/File:Suru_Bog_10000px.jpg">Wikimedia Commons</a></span></p><p class="caption">Bog lake in Suru Bog, Põhja-Kõrvemaa Nature Reserve, Estonia</p></div><p></p></div></div>Today's jobs report got a mixed reaction from economists and investors.</p>
<p>First, the scoreboard:</p>
<ul>
<li><strong>Dow:</strong> 16,512.8 (-45.9, -0.2%)</li>
<li><strong>S&amp;P 500:</strong> 1,881.1 (-2.5, -0.1%)</li>
<li><strong>Nasdaq:</strong> 4,123.9, (-3.5, -0.0%)</li>
</ul>
<p>And now the top stories:</p>
<ul>
<li><a href="http://www.businessinsider.com/nonfarm-payrolls-report-april-2014-2014-5">U.S. companies added 288,000 nonfarm payrolls</a> in April, which was much more than the 218,000 expected by economists. Furthermore, the March number was revised up to 203,000 from an earlier estimate of 192,000. During the period, the unemployment rate tumbled to 6.3% from 6.7% a month ago.</li>
<li>Initially, stocks rallied and bonds fell. But that quickly reversed, with stocks sliding into the red and bonds spiking. The bond market rally has sent the 10-year Treasury yield tumbling to an <a href="http://www.businessinsider.com/us-market-update-may-2-2014-2014-5">afternoon low of 2.5717%</a> from an intraday high of 2.6858%.</li>
<li>Economists and traders argued that the strong headline labor numbers belied some of the more worrisome details. In particular, the<a href="http://www.businessinsider.com/lfpr-falls-to-lowest-level-since-1978-2014-5"> labor force participation rate fell to 62.8%</a> in April from 63.2%. This was the lowest level since 1978. "As the BLS noted, it is a bit puzzling why the participation fell so sharply in April," wrote Bank of America Merrill Lynch's Michelle Meyer. "Looking at the details, the participation rate decline was centered on younger (aged 16-24) and prime-age workers (aged 25-54), while the participation of 55yr+ workers was roughly flat. Although the drop in participation among younger workers was steep, the decline amongst workers aged 25-54 had an equivalent impact on the overall labor force participation rate given their larger share in the labor force. Note that the participation rate had been increasing in recent months, so April's decline only reverses that trend."</li>
<li>UBS's Drew Matus argued that we shouldn't dwell on the LFPR change too much. "<span>The participation rate has been between 62.8% and 63.2% for nine months and we see little reason to believe that the drop witnessed in April will be repeated," he wrote. "Indeed, the expiration of long-term benefits is the likely reason  behind the drop in the labor force and suggests that not  everyone receiving long-term benefits planned to return to the labor market.</span>"</li>
<li>Today's market action may have also reflected news outside of the jobs report. "We are seeing heavy de-risking in Europe and London ahead of the weekend as Ukraine Headlines get worse (London and Japan three-day weekend to boot)," said Stifel Nicolaus' Dave Lutz in an email. <a href="http://www.businessinsider.com/why-the-bond-market-is-rallying-2014-5">Lutz also reiterated</a> that the bond market rally could just be a result of just too many bond traders being on the short side. "CFTC data showed that short positions in 10-year note futures were near four-year highs."</li>
<li><strong>Don't Miss: <a href="http://www.businessinsider.com/billion-dollar-problems-2014-4">Want To Become A Billionaire? Just Solve One Of These 10 Problems »</a></strong></li>
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You Searched For "lfpr" and got 7 results

STOCKS END HIGHER AFTER LOUSY JOBS REPORT: Here's What You Need To Know

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