Miami Herald: Unemployment likely will remain high for the next several years because the economic recovery won’t be strong enough to spur robust hiring, Federal Reserve officials warned Tuesday.
…rising unemployment could crimp consumers, restraining the recovery. Consumer spending accounts for about 70 percent of economic activity.
“With such a slow rebound, unemployment could well stay high for several years to come,” (Janet Yellen, president of the Federal Reserve Bank of San Francisco) said. “In other words, our recovery is likely to feel like something well short of good times.”
Yellen and Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, also highlighted the problems faced by small businesses, which have accounted for 45 percent of job losses in this recession, but typically lead an employment boom during an economic recovery. Small and medium-sized businesses, which employ more than half the American workforce, will face tight credit markets and limited access to loans well into 2010, the Federal Reserve Board said Oct. 13.
Conditions are such that some economists believe jobs and the employment market won’t recover until 2017.
(Image by Federal Reserve Bank of San Francisco)
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