Saturday, December 15, 2012
The Federal Reserve predicts that it will take until some time in 2015 to bring the unemployment rate down to 6.5%
David Rosenberg, chief economist and strategist for Gluskin Sheff & Associates, thinks even that is optimistic though. If job growth continues at its current pace of 150,000 jobs a month, it could take until 2018, he said. The unemployment rate could fall more quickly if more workers drop out of the labor force. In that case, the Fed would probably not view a falling unemployment rate as a good thing. And getting the unemployment rate back to 6.5% is only a start. It doesn't represent a full recovery. Before the recession, the unemployment rate was 5% in 2007. Every month, the Hamilton Project, an economic research arm of the Brookings Institution, publishes a "jobs gap" calculator that estimates just how long it will take to get back to that level, assuming that the only major job market dropouts are Baby Boomers who are retiring. At the current rate of hiring, the Hamilton Project estimates that it would take until 2025 to get back to a pre-recession job market.