The nation's unemployment rate may be easing, but it won't break below 8 percent by Election Day in November, leaving it above the 7.8 percent rate registered when Barack Obama took office, analysts forecast.
The unemployment rate dipped to 8.5 percent in December, which was better than expected, although the economy isn't adding enough people to make a serious dent in the jobless numbers.
If the economy can create about 268,000 new jobs a month between now and November, the country may break the 8 percent mark, says Mark Zandi, chief economist at Moody’s Economy.com, according to the Christian Science Monitor.
That's a tough task, considering the economy added a net 200,000 in December, a busy month.
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"I don’t think we’ll see consistent job gains at that pace," says Zandi.
The labor force remains small, which helps the headline unemployment rate fall and make the situation less bad than it really is, says economist Robert Brusca of Fact & Opinion Economics in New York, the Christian Science Monitor adds.
Fewer people looking for work means fewer people who can be classified as unemployed.
"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 Brusca.
"Now, it might be as low as 85,000 to 90,000 jobs per month."
Other experts are optimistic in light of December's jobs figures, but are still cautious.
"The tide is beginning to come back in," says James Glassman, senior economist at JP Morgan Chase in New York, according to Bloomberg.
"We’ve got a long way to go. This is all positive, though, that we’re actually moving forward, and that’s an important trend.”
New York Federal Reserve President Dudley, however, has said the labor market is not out of the woods yet and adds that more monetary easing may be necessary to ensure a balance of healthy unemployment rates and prices stability.
“Because the outlook for unemployment is unacceptably high relative to our dual mandate and the outlook for inflation is moderate, I believe it is also appropriate to continue to evaluate whether we could provide additional accommodation in a manner that produces more benefits than costs,” Dudley said in a recent speech, according to Bloomberg.
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