Employment Situation

From: MM001 1/24/10

The closing of NUMMI could not have come at a worse time. Jobs are very hard to come by and many people are still on unemployment looking for a job for over a year and a ½ now. Some people have become homeless after the unemployment checks have ended. Many of us here will face hard times ahead. Jobs are still being lost. Some analysts say this current high unemployment rate is an integral part of our economy and is not likely to come down for the next decade. Mike Shedlock writes in his blog:

Please download the spreadsheet (available in the top link), read my assumptions, then factor in your own assumptions about job growth, outsourcing, productivity, stimulus plans, housing, etc., whatever you want and see for yourself just how hard it will be to get unemployment under 8%, let alone under 6%.

Remember back a decade or so ago when economists thought it was not possible to have unemployment below 7% without a lot of inflation. What if they were correct and the 5% we have had this decade was an outlier? Is that so farfetched?

If after playing around with the spreadsheet you come to the conclusion that we are going to have structurally high unemployment for a decade, I believe you have come to the right conclusion.

http://globaleconomicanalysis.blogspot.com/2009/11/mapping-unemployment-you-make-call.html