423,000 in November. 257,000 in January. 223,000 in April. 280,000 in May. Economists are acting like the new normal in monthly jobs growth is 200,000-plus. They’re celebrating a 5.5% unemployment rate. It’s as if no one else is looking at demographics! But even then, today’s figures don’t tell the whole story.

The labor force is 157.5 million people as of May. If you include the labor force participation rate, the unemployment rates moves from 5.5% to around 9.2%! The participation rate fell between January 2007 and March 2015, from 66.4% to a low of 62.7%. That’s a loss of 5.85 million people! How convenient to exclude that staggering number from the unemployment rate!

Then if you add the people who are working part-time but want full-time work, unemployment gets close to 11%! But the numbers simply don’t tell the whole story.

There’s really only one reason we’ve been experiencing the kind of job growth we’ve seen since the financial crisis, especially over the past two to three years. We’re making up for what we lost in the financial crisis.

New Update on the Markets!

Harry Dent shares details on his latest prediction for the markets and the new dangers that lie just ahead for Americans:   “This is no longer a question of ‘if,’ but simply a… Read More>>

In 2008 and 2009 alone we lost close to 8.7 million jobs. Of course we’ve been adding around 200,000 jobs every frickin’ month for the past couple years! An economy is supposed to recover coming out of a recession.

Another way of putting it is this: We haven’t really gained anything. We’re just making up for lost time!

But this won’t go on for much longer. With our demographic outlook, the picture looks much worse ahead. Once we catch up on these laid off workers and get to full employment, our labor force will grow at a rate of only 0.5% for the rest of this decade. Next decade it’s even worse, at 0.2%.

At 0.5%, we grow at a rate of about 66,000 a month — nowhere near 200,000.

Let’s compare the U.S. to Germany and Japan to get an idea of where this is going.

Falling Workforce Growth Germany Japan and U.S.

Japan aged first as its baby-boom births peaked between 1942 and 1949. This isn’t on the chart, but in the 1960s, its peak labor force growth was 2.2%. As you can see, it fell to 0.4% in the 1990s, and -0.5% in the 2000s. This decade, it drops to -1.0%, and will continue in the red next decade at -0.7%.

Germany looks no better. That country peaked at 1.1% in the ‘80s and fell to -0.3% both this decade and last. In the 2020s they’ll see a crushing rate of -1.1%.

The U.S. has fared better due to high immigration in the past, but even that’s been fading since the recession and will be even lower in this slow-growth economy.

Where does that leave us going forward? With fewer jobs, businesses won’t expand into new office buildings or factories. With fewer jobs, less and less people will buy houses. Even with jobs growth aside, demographics will continue to eat away at real estate as I showed in Chapter 3 of The Demographic Cliff. There will be more boomers dying than new adults coming of age to buy homes.

That will cause net demand for homes to fall until 2039. Economists are simply projecting trends in a straight-line pointing up. How stupid and naïve! A simple demographic calculation shows that economic and job growth ahead will be nothing like projected.

Even when the next global boom begins in the early 2020s, the growth rates for GDP, labor force and real estate will be much lower than the boom we saw between 1983 and 2007. We’re putting together the July issue of Boom & Bust, where Rodney will explain what’s in store for America’s economic future. Subscribe now to get this latest issue hot off the presses.


Follow me on Twitter @harrydentjr

Harry Dent
Harry S. Dent Jr. studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of his chosen profession that he turned his back on it. Instead, he threw himself into the burgeoning new science of finance where identifying and studying demographic, technological, consumer and many, many other trends empowered him to forecast economic changes. Since then, he’s spoken to executives, financial advisors and investors around the world. He’s appeared on “Good Morning America,” PBS, CNBC and CNN/Fox News. He’s been featured in Barron’s, Investor’s Business Daily, Entrepreneur, Fortune, Success, U.S. News and World Report, Business Week, The Wall Street Journal, American Demographics and Omni. He is a regular guest on Fox Business’s “America’s Nightly Scorecard.” In his latest book, Zero Hour: Turn the Greatest Political and Financial Upheaval in Modern History to Your Advantage, Harry Dent reveals why the greatest social, economic, and political upheaval since the American Revolution is on our doorstep. Discover how its combined effects could cause stocks to crash as much as 80% beginning just weeks from now…crippling your wealth now and for the rest of your life. Harry arms you with the tools you need to financially prepare and survive as the world we know is turned upside down! Today, he uses the research he developed from years of hands-on business experience to offer readers a positive, easy-to-understand view of the economic future by heading up Dent Research, in his flagship newsletter, Boom & Bust.