Labor Supply Expected To Increase 1.2% As Those Who Gave Up On Finding A Job Re-Enter The Search Hot

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The expansion in the labor force will also slow down the drop in the unemployment rate. This is because there will be more job seekers in the calculation and the number of jobs available will have to catch up.
 
Analysts see the unemployment rate dropping to 7.5% by year-end from the current 7.9% level. Overall, a larger pool of job seekers is good because it increases the economy’s ability to grow. More jobs, more disposable income, more consumer spending.
 
The gradual fall in the unemployment rate will also continue to give the Fed room to keep monetary policy easy for a longer period of time without inflation worries.
 
This causes some analysts to think the Fed will continue its bond-buying programs even into next year, although perhaps at a reduced pace.
 
One of the biggest issues with the economy has been the fact that many job seekers have fallen out of the search, making it more difficult for growth in the economy to take hold.
 
There is some worry that those who have been out of the market for extended periods will have difficulty landing a job because their skills have not kept up.
 
About 1.8 million of these could re-enter the job market as more jobs open up as the economy gets stronger.

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