Where Are These Jobs Coming From?

As always, the jobs market remains a bit of a mystery. If you think you have an explanation for the recent jobs growth, I'm about to show you that you are wrong. (Notice I didn't say "US jobs market", which is already a clue that the mystery is even deeper than we imagine.)

Job growth has been running at around 200,000 per month, and the unemployment rate has fallen to 3.7% (lowest since the 1960s.) It's best to start with the accounting, which basically involves three factors: population growth, the labor force participation rate, and the unemployment rate. You can use prime age labor force participation, but that makes things more complicated and also misses the growth in older workers...

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