No relief in sight for millions of unemployed Americans: Cleveland Fed report

June 7, 2013

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.

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