I have been saying that it takes roughly 90,000 jobs a month to keep pace with the underlying growth rate of the labor force. This means that more rapid growth should lead to declines in the unemployment rate while less rapid growth would lead to increases.
Many other analysts have used higher numbers. For example, in her NYT blognote, Catherine Rampell suggested that the necessary number for keeping pace with the growth of the labor force is 150,000 jobs a month. People have often asked me to explain the difference.
I can't say where others are getting their higher numbers from, but I know where I get my numbers. The Congressional Budget Office projects that the labor force will grow 0.7 percent annually for the next several years. If we go back to the prerecession level of payroll employment (140 million), this implies 980,000 jobs a year or 82,500 a month.
There is another way to back out a growth number. The Bureau of Labor Statistics estimates that the civilian noninstitutionalized population over age 16 increased by 1,781,000 people over the last 12 months. If we assume that 64 percent of this increment to the above age 16 population is employed (roughly the 2000 percent) then this would imply an increase in employment of 1,140,000.
However, this would overstate payroll employment slightly since roughly 6 percent of the workforce is selfemployed. If we assume that 6 percent of the increment is also selfemployed, this implies that roughly 1,070,000 payroll jobs are needed to keep pace with the growth of the labor force, or just under 90,000 a month.
Anyhow, that is how I get my job growth estimate.
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