Economist David Rosenberg said the U.S. jobless rate could hit a post-World War II peak of 13 percent, thanks to a sluggish economic rebound.
Already, unemployment reached a 26-year high of 10.2 percent in October
“This is going to be the mother of all jobless recoveries,” Rosenberg, chief economist at Gluskin Sheff & Associates, told Bloomberg.
“At the beginning of the year, who was calling for unemployment to go up to 10 percent?”
The effect of this recession, the worst since the Great Depression, won’t end quickly, Rosenberg said. The economy is “in a post-bubble credit collapse.”
If the jobless rates does climb to 13 percent, that would constitute the biggest number since the Labor Department started tracking monthly figures in January 1948.
The U.S. could be set for 10 years of sub-par economic growth, just like Japan in the 1990s, Rosenberg said.
“This has some prints of Japan in many respects.”
In the U.S., he noted that “20 percent of private credit is coming out of the system, and on a semi-permanent basis.”
Consumer credit has dropped for eight straight months through September, Rosenberg pointed out.
Other experts also are worried about jobs.
Chris Rupkey, chief economist at Bank of Tokyo-Mitsubishi, told Associated Press that the 10.2 percent unemployment rate is "a kick in the stomach."
He said it could take at least four years for the rate to return to 5 or 6 percent.
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