The monthly employment report is once again rather depressing. The unemployment rate fell only because of a sharp decline in the labor-force-participation rate. The participation rate hit the lowest level in 31 years, which is stunning considering that, historically, the participation rate climbs at this stage in the recovery. While teens returning to school had some effect because it appears that the labor models have not yet factored in how bad the labor market is for youth, a more important story is that the adult male labor-force-participation rate hit a new all-time low (since the government started collecting the number in 1948).

Other numbers in this report continue to indicate a weak labor market: Downward revisions to previous reports reduced previous job growth by 41,000; average wages actually declined in August, as did the number of temporary help and manufacturing workers.

This report simply confirms that there is no real recovery in the labor market. Job gains are scarce and many potential workers are not even trying to find jobs. It is doubtful that robust labor-market gains are in the future given the massive tax increases slated for 2013; businesses already are adjusting their investment plans because of the fiscal cliff.