Unemployment Rate Forecast

Economic Forecasts

Labor Force Participation Ticks Up

Kiplinger’s latest forecast on jobs


GDP 2019 growth will be 2.3%; 1.8% in 2020 More »
Jobs Job gains of about 150,000 per month in ’20 More »
Interest rates 10-year T-notes staying well below 2% until coronavirus fears ease More »
Inflation 2.1% by the end of ’20, from 2.3% at end '19 More »
Business spending Unchanged in '20- coronavirus makes global outlook uncertain More »
Energy Crude trading from $50 to $55 per barrel until coronavirus fears ebb More »
Housing Total starts up 3.2% in '20 More »
Retail sales Retail and food service sales, excluding autos and gas, should rise 3.5% in 2020 More »
Trade deficit Widening 6% in ’20 More »

The labor force participation rate for prime-age workers (ages 25-54) ticked up in January to its highest level since 2008. As the unemployment rate has dropped to just 3.6%, worker shortages have led employers to step up recruitment efforts.

The 225,000 workers hired in January reflect the underlying strength of the economy. The usual sectors showed large gains: Health care, restaurants, e-commerce delivery and warehousing. Construction jobs jumped as the mild winter allowed more hiring than usual. Hiring for the 2020 Census has begun, with 12,000 temporary Census takers signed on so far, and more to come later in the spring.

Trouble spots were also familiar: Manufacturing industries related to slow exports, such as metals, machinery and autos. The coronavirus outbreak in China is likely to reduce both U.S. exports and imports this year. Retail, especially department stores, saw continued job losses.

Monthly job growth in 2020 is likely to average 150,000 hires, down from 175,000 in 2019 and 193,000 in 2018. Partly, that is because there are fewer available workers to hire, given the low unemployment rate. But the smaller gains also signal that the economy is easing a bit to a more moderate growth rate.


Wages grew at a moderate 3.3% rate for nonsupervisory workers. Moderate wage growth is likely to allay the Federal Reserve’s concerns about potential future inflation, making it less likely to raise interest rates in the near term. In fact, the Fed seems more worried about inflation coming in too low, rather than too high.