But Mr. Zandi doubts the economy can sustain that rate of job growth. “I don’t think we’ll see consistent job gains at that pace,” says Zandi, who was an adviser to Sen. John McCain’s presidential campaign in 2008.
However, the labor force has not been growing at its usual clip, and that could help the unemployment rate to fall, argues economist Robert Brusca of Fact & Opinion Economics in New York. The labor force has been growing of late at a rate of about 0.7 percent, he says.
“It used to be you needed job growth of 150,000 [a month] to keep the unemployment rate from rising” because of the expanding population, says Mr. Brusca. “Now, it might be as low as 85,000 to 90,000 jobs per month.”
Adding about 90,000 new jobs a month would keep the unemployment rate at 8.5 percent. To reduce the rate to 8 percent, Brusca calculates, the economy would need to create 2,057,000 jobs between now and Election Day, or an average monthly rate of 260,000. And that's just what it’s been doing for the past five months.
The big unknown, says Brusca, is how much the labor force will grow during that time. Like other economists, he’s not sure why fewer people are in the workforce. Is it because wages have been flat and people don’t see it as worthwhile to search for work? Is it baby boomers slipping off into retirement?
A drop in immigration may be part of the explanation, says Zandi. He observes, too, that the largest decline in workforce participation is among white female college graduates. Some reports indicate that they have stopped looking for work and returned for additional education.
Labor Department surveys show 2 million more people than in 2007 indicate that they want to work, says Zandi. “You would think they would start stepping back into the labor force,” he says. “That’s why it will be tough to get below 8 percent by Election Day."