More employment forecasts

My simple VAR forecasting model (unemployment and continuing claims; employment and initial claims) tells me that December's employment situation will not be much improved over November's: Change in employment = -9000, unemployment rate = 9.9 percent. It shows strong growth in employment starting in January.

Every fiber of my being, however, tells me the employment number will be in positive territory. It's been rising by 70,000 or so every month, so let's say +60,000. That would certainly be consistent with recent economic releases that suggest a quickening pace to recovery. The unemployment rate is dicier: the labor force participation rate has fallen dramatically in this recession, meaning there are a lot of people out there who would ordinarily be working but aren't, and aren't counted as unemployed either. Strong growth in jobs could draw these people back into the labor force while not having a significant effect on the unemployment rate.