Will a Jobless Recovery Boost Unemployment?
According to an analysis by the San Francisco Fed, the American economy may be facing a jobless recovery similar to the one after the 1991 recession. Two current trends suggest such an outcome: an increase in the rate at which workers settle for involuntary part-time employment and a decline in the rate of temporary layoffs. The San Francisco Fed’s earlier expectation in May was that unemployment could peak at 11 percent in mid-2010 -- significantly higher than the consensus forecast of 10 percent by early 2010. Given the accelerating pace of joblessness, an updated analysis based on the factors cited by the San Francisco Fed would suggest that the peak might be even higher at 11.5 percent or 12 percent. By Robert Stowe England mindovermarket.blogspot.com July 1, 2009 (Updated July 2 with new unemployment data) An analysis of labor market data suggests that this recession may be followed by a jobless recovery like the one following 1991 rather than a sharp rebound in hiring that occurr...