“The threshold to push the unemployment rate down is a lot lower than most people believe,” Maki said today in a radio interview on “Bloomberg Surveillance” with Tom Keene. Maki said that the average monthly payroll growth of 75,000 to 100,000 is needed to maintain a stable unemployment rate.
An increase in the number of Americans leaving the workforce helped push the rate down to 8.6 percent in November, the lowest level since March 2009, according to Labor Department figures. Federal Reserve policy makers see the jobless rate falling to between 8.5 percent and 8.7 percent in the fourth quarter of next year.
“More and more of the baby boomers are retiring every month, that means the labor supply is simply growing a lot more slowly than it used to,” Maki said.
Payrolls climbed by 120,000 workers in November after a 100,000 gain the prior month. Economists such as Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York, say payrolls gains in the range of 100,000 to 125,000 in the coming year will, at best, stabilize the jobless rate.
Maki says he’s “optimistic” on the outlook of the U.S. economy. We see a “moderate growth economy,” Maki said, even as Europe slides into recession and growth slows in China.
“The euro area is in recession in our view and China is slowing down modestly,” Maki said. “The euro is not attractive given what’s happening in Europe.”
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