BLS

Hey do you think if Obama blows another debate we can get an unemployment report of only 5%? Just wondering.

The trendline of the U-3 number is dropping about 0.2 tenths per month primarily as the 99'ers are automatically removed from the number and dumped into oblivion. Eventually enough workers will exit the US workforce that 5% will be reached. The Labor Force Participation Rate graph shows this steady reduction of the workforce effect most clearly.

The only fly in the ointment to reach 5% is if the US economy dips into a new recession. With GDP rapidly decelerating toward zero growth or below, the risk of a new recession is pretty high. If / when GDP turns negative, then U-3 will reverse course and trend back up above 10%. For a rough guestimate simply add 5% of new unemployment to whatever number marks the low of U-3 when it bottoms. So if we start at a low of 7.5% for example when GDP drops below the zero line, then the new recession would take U-3 back up to at least 12.5%, and probably higher than that considering the current structural instability of the global economic system.