Economists: No Job Growth Until Mid-2010. If We're Lucky.
Even though the economy is predicted by many to come out of recession later this year (achieving positive GDP), the U.S. will not see job growth until the middle of next year, Mark Zandi, chief economist at Moody's, told Kiplinger today.
John Silvia, chief economist with Wachovia, said the economy is not getting worse, but it's not getting better as fast as people hoped or believed: "We're just not improving as much as people hoped. The idea of job growth by the end of this year is out the window."
Unemployment is known as a "lagging indicator" of an economy's overall health, because joblessness usually continues growing well after a recession ends. For instance, unemployment continued to rise for 15 months after the end of the 1991 recession, Kiplinger reports.
Now standing at 9.5 percent, up from 9.4 percent in May, the official U.S. national unemployment figure is predicted to peak somewhere over 10 percent by early next year.
Of course, the actual U.S unemployment rate is much higher -- 16.5 percent -- as we wrote here last week.
Because of the economy's overall growth, it takes a monthly increase of about 127,000 jobs to keep unemployment from rising. Last month, the economy shed a greater-than-expected 467,000 jobs.
The Ticker will appear on Dennis Kneale's show on CNBC tonight at 8:10 p.m., to talk about unemployment, among other topics.
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