By Matt McDonald,(202) 822-1205, mmcdonald@hamiltonps.com

We have seen theglimpse of a jobs recovery over the past several weeks.  Unemploymentclaims have continued to fall below the key 400,000 level, with the most recent4-week rolling average at 373,000.  Likewise, the ADP payroll estimatecame in at a robust 325,000 new jobs for December.

While some of theseforward-looking numbers hold promise, the actual jobs numbers so far have beenmiddling.  Hopefully the numbers tomorrow will turn that around.  Butthe real missing piece for a true recovery in the job market has beenworkers.  Even as the unemployment rate dropped from 9 percent to 8.6percent last month, a little over half of that decline was due to workersdropping out of the labor force.

Labor forceparticipation averaged 66 percent through most of the 2000s.  It nowstands at 64 percent after declining again last month.  If more peoplewere still looking for jobs, and the participation rate were back up at 66percent, the unemployment rate would now be 11.4 percent instead of 8.6percent.

What all this meansis that workers have been voting with their feet and choosing to notparticipate in a job market they see as weak.  Because participation is ameasure of worker/voter attitude, it will be an interesting metric to watchthis election year.  It points as much to how voters are thinking aboutthe job market as how the job market is actually performing.

Over the holidays,the President said that he thought the unemployment rate could break 8 percentby Election Day.  To reach that point, he needs to see 254,000 jobs permonth between now and then.  This is a high number, beyond what we haveseen in recent months.  Beyond that, the unemployment rate is likely tobecome sticky in the mid-8 percent range as the participation rate begins tocreep back up.

It’s hard to knowexactly how many workers are waiting in the wings, but we can look at someestimates.  CBO last spring projected that between 2010 and 2012 the laborforce would add 2.9 million workers.  Halfway through that period, we’veactually added just shy of 200,000 workers.  If those workers domaterialize, we’re going to need a much higher job number each month just tokeep pace, closer to 170,000 jobs per month than the more typical 130,000 jobsper month.

All of this is areminder that even with potential good news on the jobs front, America’s jobcreation engine is so broken it’s going to take some time to fix.

MattMcDonald is a partner at Hamilton Place Strategies and a veteran of twoPresidential campaigns and the White House.  Prior to joining HPS, Mattworked for McKinsey and Company.  He holds an MBA from MIT’s Sloan Schoolof Management and a degree in economics from Dartmouth College.