At a very modest labor force growth to 157 million (a mere 90,800 a month since the recession ended), the unemployment rate would be 9.8%. Using Bernanke’s estimate of 125,000 jobs a month, the labor force would be 158,480,000 and the unemployment rate would be 10.6%. Growing at the trend, the unemployment rate would be 11.5%. – Mish Shedlock

 

Mike “Mish” Shedlock at Mish’s Global Economic Trend Analysis

 

EXCERPTS:

The BLS labor force numbers seem suspect. The labor force is less now than when the recession ended 2.5 years ago.

Current Labor Force: 154,395,000.
June 2009 Labor Force: 154,730,000.

Based on trends, the labor force ought to be close to 160,000,000.

Boomer demographics can explain part of the “trendline failure”, but not all of it. The US is adding work-aged population every year, just at a decreasing rate. In other words, the labor force should be rising, even if at a reduced rate (at least in theory).

 

The recession ended in June of 2009. The labor force was 154,730,000. The Labor force is now 154,395,000. Is this credible? If it’s not credible, then neither is the unemployment rate!

Unemployment Rate What If?

Labor Force 155,000,000 8.6%
Labor Force 156,000,000 9.2%
Labor Force 157,000,000 9.8%
Labor Force 158,000,000 10.4%
Labor Force 159,000,000 10.9%
Labor Force 160,000,000 11.5%

At a very modest labor force growth to 157 million (a mere 90,800 a month since the recession ended), the unemployment rate would be 9.8%.

Using Bernanke’s estimate of 125,000 jobs a month, the labor force would be 158,480,000 and the unemployment rate would be 10.6%. Growing at the trend, the unemployment rate would be 11.5%.

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