“The buoyant monthly employment gains that accompanied prior recoveries are not likely to be repeated. Indeed, even if GDP growth were to surprise on the high side (3.1 percent for 2013 as illustrated in the cyclical LFPR scenario), employment growth generated by our model would still be just 147,000 per month in the current year, even though the economy would be on a path to a 6.5 percent unemployment rate by the third quarter of 2014” write Mark E. Schweitzer and Murat Tasci.
“Ultimately, the degree of change in employment growth or the unemployment rate required to represent a “substantial” amount of progress in the labor market outlook is a subjective judgment. However, the pattern of employment growth that the economy will generate over a multiyear span depends importantly on output growth, the trend paths of labor market dynamism, and labor force participation. In this Commentary we used a simple model of labor markets to demonstrate why it is reasonable to think that the monthly pace of employment gains is likely to be smaller than the U.S. has seen in past recoveries.”
Chosen excerpts by Job Market Monitor
US / Employment growth above about 80,000 jobs per month would put downward pressure on the unemployment rate finds research
Daniel Aaronson and Scott Brave « estimate that, currently, employment growth above about 80,000 jobs per month would put downward pressure on the unemployment rate » in Estimating the trend in employment growth on Chicago Fed Letter. (Adapted Chosen excerpts by Job Market Monitor to follow) Likewise, anything short of this benchmark would push the unemployment rate up. … Continue reading »
Below is an update of the graph showing job losses from the start of the employment recession, in percentage terms, with a projection assuming the current rate of payroll growth will continue. This suggests that employment will exceed the pre-recession peak around July 2014 (Private employment will reach a new high around March of 2014). … Continue reading »