How Many Jobs Do We Need to Hit 5% Unemployment?

NEW YORK (MainStreet) -- Wondering what it would take for the labor market to return to the 5% unemployment rate we had just before the recession hit in 2007? A new online tool can help you find out.

The Federal Reserve Bank of Atlanta introduced a calculator this week that predicts the number of jobs the economy would need to add in a given period to reach a target unemployment rate, based in part on the most recent data from the Bureau of Labor Statistics on the current rate of labor force participation and population growth.

Assume the economy continues to add 230,000 to 240,000 jobs a month and that labor force participation remains the same and it would take about 34 months to hit 5% unemployment, or basically until the end of 2014.

For example, users can enter the target unemployment rate of 5% and set the timeline for one year. Based on these two data points, the calculator predicts the economy would have to add an average of 485,067 jobs each month to reach that goal -- certainly wishful thinking considering that the economy has added about half that number in each of the past two months.

If we assume the economy would continue to add 230,000 to 240,000 jobs a month as it has done recently and also assume that the labor force participation rate remains the same -- two very generous assumptions -- it would take about 34 months to hit 5% unemployment, or basically until the end of 2014.