THE prospects for significant job growth in 2010 are dim and the unemployment rate could still be in the 10 per cent range this time next year, economists say.
Growth of three per cent would be far slower than is usual after a steep recession, but it would be slightly stronger than the 2.8 per cent average of the past 20 years.
Above-trend growth "never felt so bad," wrote economists at JP Morgan Chase. "Growth will not be boomy. And growth will not go far in returning the economy to healthy levels of activity."
According to the median forecast of economists surveyed by Blue Chip Economics, about 1.1 million nonfarm payroll jobs will be created next year.
The consensus expects the unemployment rate to be 9.9 per cent a year from now in the US.
Typically, after such a steep recession, job growth would snap back quickly as firms ramp up production to meet the desires that were repressed during the downturn.
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This time, however, the lingering impact of the financial crisis will mean less consumption, less investment, and less hiring than normal.
Economists at Goldman Sachs figure the unemployment rate won't peak until the middle of 2011 and will drop back to 10.5 per cent by the end of 2011.
That's at least two more years of remarkably high unemployment.
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