The September Non-Farm Payroll Report came in with a net increase of just 142k jobs. The unemployment rate held steady at 5.1% and the labor force participation rate dropped to the October 1977 low of 62.4%. Average hourly earnings fell 0.04% and the workweek slipped to 34.5 hours. There were significant downward revisions of 22k and 37k jobs for the July and August reports respectively.

Just as important as today’s NFP report, but mostly overlooked, was the Challenger’s Job-Cut Report released on Thursday. It showed the September layoff count jumped from 41,186 in August to 58,877. The total number of layoffs year-to-date is 493,431, which is already higher than all of last year and is on a trajectory to be the greatest number of layoffs since 2009.  

The tenuous state of our economy has led to an unskilled and unproductive labor force. According to the Bureau of Labor Statistics (BLS) an employed person constitutes anyone who worked for pay during the survey week. Therefore, if you provided one Uber ride around the block the BLS considers you employed with the same economic relevance as a full-time brain surgeon. In fact, our part-time low-paying job market is the reason productivity growth has averaged a meager 0.45% annually during the past four years.

So Where Does This Lead the Fed?

The real issue is despite Yellen’s recent nod to a slowing global economy, the FOMC still remains obsessed with the relatively low unemployment rate. This is because of the wrong-minded belief that too many workers will suddenly hyper-inflate our deflating worldwide economy.

While Yellen and Company busily tinker with their Phillips Curve models–in a fatuous attempt to determine how many Americans they should allow to find work–they are missing the crumbling economic fundamentals all around them. The flattening yield curve, plummeting commodity prices, and weakening U.S. and international economic data; all illustrate that the asset bubbles created by central banks have started to pop.