The unemployment rate will likely remain above 9 percent for the next two years, says John Ryding, former chief economist at Bear Stearns.
Unemployment now stands at 10 percent.
“This economy needs to create 200,000 to 300,000 jobs a month for two years to start getting the unemployment rate down to acceptable levels: 6 percent,” Ryding, now chief economist at RDQ Economics, told Bloomberg.
“The chance of getting down to that within the next three to four years looks fairly remote to me. I think we’re going to see 9 percent-plus unemployment for a couple years and then 8 percent for maybe a year or so after that.”
Experts may be underestimating the economy’s recovery, Ryding says.
“But look at the fourth quarter. We generated 5.7 percent GDP growth and no jobs. If that is going to be the pattern, then the growth hurdle we have to overcome to start creating jobs is all the higher.”
As a result of the weak job growth, “I think the Fed is going to do exactly what they’ve been doing, which is a whole lot of nothing,” Ryding said.
“They’re going to leave rates at zero. I don’t see an early exit.”
President Obama’s chief economic adviser Larry Summers also worries about the unemployment problem.
He said in a recent speech that while the economy is in a “statistical recovery,” it’s also in a “human recession.”
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