The Unemployment Rate Drops, but Economists Aren't Smiling

The U.S. unemployment rate lurched downward in November to 8.6 percent, from 9 percent in October. That’s the lowest level since March 2009, and it emboldened some optimists to predict the U.S. could be back near full employment within a couple of years. Pessimists, on the other hand, say the jobless rate will rise between now and 2013. The consensus view is pretty bearish, too. The median forecast of economists is for scarcely any decrease in the unemployment rate over the next two years.

Economists disagree on the job question because they entertain different scenarios for the factors that affect it. Those include the underlying health of the U.S. economy, spillover from Europe’s financial crisis, fiscal policy in Washington, and swings in the labor-force participation rate.