Adding a net 71,000 private-sector jobs a month to the economy might sound like a lot. But that’s a tiny fraction of the number of people unemployed in the U.S. It’s not even enough to keep pace with the nation’s population growth.
Right now, the nation’s labor pool is about 154 million people, or just under 65 percent of the 238 million Americans ages 16 and older who are eligible to work.
Nearly 139 million Americans are working. An additional 14.6 million want jobs but can’t find them. The government excludes the remaining 84 million people from the work force — either because they are retired, not interested in working or want a job but have given up looking.
So given those numbers, how much job creation is needed to bring down the unemployment rate?
Let’s start with the basics. Just to keep pace with the growth in population, the economy has to add at least 100,000 net jobs each month. Some experts say the figure needs to be closer to 125,000.
But to significantly reduce the nation’s 9.5 percent unemployment rate, the monthly gains in private-sector jobs would need to equal at least 200,000 consistently.
Even if hiring picks up, it will take years to regain all the 8.4 million jobs lost during the recession. This year, private employers have added a net total of only 559,000 jobs.
Stronger economic growth would help. The economy grew at 5 percent in the fourth quarter last year and 3.7 percent in the first three months of 2010. But it slowed to 2.4 percent in the April-June period. That’s not fast enough to generate many jobs. Most experts say a full year of economic growth at 5 percent would create enough jobs to lower the unemployment rate by just one percentage point.
For the rest of the year and early next year, growth is likely to be less than 3 percent, according to the latest to Associated Press quarterly survey of leading economists. Among their forecasts is that the unemployment rate will be no lower at the end of the year than it is now. A majority said it would be 2015 or later before the rate falls to a historically normal 5 percent.