The U.S. economy may need fewer than 10,000 new jobs per month to maintain a stable unemployment rate this year, Federal Reserve researchers said in a paper published Wednesday—a threshold so low it would force a fundamental rethinking of how Wall Street, the press, and policymakers evaluate the monthly employment report.
The analysis, by Fed economists Seth Murray and Ivan Vidangos, finds that the “breakeven pace” of job creation—the number of positions the economy must add each month to hold the unemployment rate steady—has plunged to nearly zero, reflecting a sharp pullback in net immigration and the continued retirement of baby boomers. Both factors have slowed growth in the available pool of workers to a pace not seen in at least 65 years.
The finding reframes what counts as a strong labor market—and it also reframes the recent past. Last year, monthly job growth averaged roughly 181,000, a pace that was widely characterized in financial media and on Wall Street as disappointing or anemic. But the researchers’ framework suggests otherwise: the breakeven pace in 2025 was approximately 85,000 jobs per month, meaning the economy was generating more than twice the number of jobs needed to absorb new entrants to the labor force. By that measure, the 2025 labor market was not soft at all—it was comfortably outpacing demand for work.
The mismatch between the data and the conventional reading of it reflects how deeply anchored analysts and reporters have become to benchmarks set during the immigration surge of 2023 and 2024, when a rapid expansion of the labor force pushed the breakeven pace to roughly 155,000 jobs per month. Against that yardstick, 181,000 looked pedestrian. Against the actual breakeven, it looked strong.
The breakeven pace has fluctuated widely over the decades. It averaged as high as 185,000 jobs per month during the 1970s, when women were entering the workforce in large numbers and baby boomers were reaching working age. It fell to about 80,000 during the 2010s as population growth cooled and retirements picked up. Even the pandemic-era trough of roughly 50,000 in late 2020 would be well above the near-zero level the researchers now project for this year.
The Bureau of Labor Statistics reported that the civilian population grew at an annualized rate of just 0.4 percent in the first two months of 2026, and the researchers suggested even that figure may be too high. The Census Bureau’s current projections assume net immigration will add about 320,000 people this year, a forecast built on data available only through mid-2025. A more recent Brookings Institution analysis, incorporating updated enforcement and visa data, estimated the actual contribution could range from negative 925,000 to positive 185,000. The midpoint of that range would put population growth below 0.2 percent.
The compressed breakeven pace also means that monthly jobs reports will become noisier and harder to interpret. The researchers noted that if the economy is growing at its long-run potential, negative payroll prints would be roughly as likely as positive ones in any given month—an artifact of normal statistical variation around a near-zero trend, not evidence of a downturn. Monthly declines of 100,000 or more would fall within the 90-percent confidence interval of the BLS establishment survey.
That point carries practical implications for the Federal Reserve’s own decision-making. A single weak employment report—or even a string of modest declines—would no longer carry the same signal about the economy’s health that it would have just two years ago, when the labor force was growing rapidly enough to require six-figure monthly job gains just to keep pace.
The paper also highlights a shift in what drives the economy’s productive capacity. Since 1960, labor force expansion—fueled overwhelmingly by population growth—has contributed about 1.4 percentage points per year to potential GDP growth, which has averaged roughly 3 percent over that span. With that contribution approaching zero, any growth in the economy’s potential output this year would depend on gains in worker productivity.
The researchers noted that the demographic forces behind the slowdown are unlikely to reverse soon—population aging is a decades-long process—and that the current immigration policy environment points to no near-term rebound. They described near-zero labor force growth as potentially “the new norm for some time.”
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