Where is Unemployment Headed?

“Bernanke estimates it takes about 125,000 jobs a month to keep up with population growth. Demographically speaking, I agree with that number but it should decline over the next few years as boomers retire.”

That number does not make sense to me.

In 2011 population grew by 3.584 million.

The labor participation rate for February 2012 was 63.9%.

Multiply 3.584 million times 0.639, then divide by 12 months.

It requires 190,000 new jobs each month to keep up with population growth AND hold the unemployment rate at 8.3%.

Also, labor participation rates are near historic lows.

The author seems to think that as Baby Boomers retire, the participation rate will go even lower!

Think about that.

The “unemployment rate” will go down.

But fewer and fewer working Americans will have to pay the bills for more and more “outside the work force” Americans.

That's a catastrophe.

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