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CUNA to media Stubborn unemployment will hurt growth
MADISON, Wis. (12/6/10)--A stubbornly high U.S. unemployment rate will continue to hurt economic growth heading into the new year, a Credit Union National Association (CUNA) economist told Thursday prior to the government’s Friday release of unemployment figures. Even as the economy adds more jobs in the coming months, the unemployment rate will continue to stay around 9.5% through 2011, Mike Schenk, CUNA vice president of economics and statistics, told The Street. A Labor Department report issued Friday indicated the unemployment rate rose to 9.8% in November from 9.6% the prior month. “The level of growth we are seeing at this point is barely enough to cover new entrants into the job market,” Schenk added. To significantly lower unemployment--not something he anticipates occurring in the next 12 months, Schenk estimates jobs will have to grow at a pace of 400,000 per month. Even if the economy manages to add 175,000 jobs on a continual basis, the better employment prospects will probably cause discouraged job seekers to resume their searches, which would keep the unemployment rate high, he told the publication. The economy needs to grow between 2.75% to 3% for the job market to be in better shape, Schenk explained. “2.5% growth just won’t cut it,” he added. To read the article, use the link.
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