Unemployment Hits 9.4%
While the number of layoffs in May fell below expectations, the unemployment rate has now risen to 9.4%, a 25 year high. With 14.5 million Americans unemployed and countless others underemployed, any full recovery will have to be a long one.
Many economists believe the jobless rate will hit 10 percent by the end of this year. Some think it could rise as high as 10.7 percent by the second quarter of next year before it starts to make a slow descent. The post-World War II high was 10.8 percent at the end of 1982.
The Fed says unemployment will remain elevated into 2011 given the expectation of tepid recovery. Economists say the job market may not get back to normal — meaning a 5 percent unemployment rate — until 2013. Economic recoveries after financial crises tend to be slower, economists say.
But many economists also think we could start seeing growth again by as soon as the third quarter of this year. The question is, given the turmoil in the auto industry and continued ups-and-downs on Wall Street, will the economy grow quickly or will it be a creeping sort of growth, fueled more by the fact that weâ€™ve hit rock bottom than by any returning strength?
Weâ€™ll have to wait and see. And hope for the best.