No relief in sight for millions of unemployed Americans: Cleveland Fed report
The new normal is getting old. And when it comes to America’s stuttering employment market, it’s not going to get much better any time soon, according to a new report from the Cleveland Fed.
The U.S. economy created 175,000 new jobs in May, while the jobless rate rose slightly. It was a neither-here-nor-there sort of report. In the Labor Department’s own words: Both “the number of unemployed persons, at 11.8 million, and the unemployment rate, at 7.6 percent, were essentially unchanged in May.”
Unfortunately, this anemic pattern is likely to be long-lasting, write Cleveland Fed economists Mark Schweitzer and Murat Tasci.
The details of their analysis are here but this is its rather sobering conclusion:
The buoyant monthly employment gains that accompanied prior recoveries are not likely to be repeated. Indeed, even if GDP growth were to surprise on the high side [around 3%], employment growth generated by our model would still be just 147,000 per month in the current year, even though the economy would be on a path to a 6.5 percent unemployment rate by the third quarter of 2014.