According to a Reuters.com article citing a study from the UCLA Anderson Forecast group, U.S unemployment rates will remain high over the next year, as the economy recovers at a slower than expected pace.
"Specifically, we forecast that after growing at 2.8 percent in the most recent and current quarters, real GDP growth will settle into a 2 percent growth path for much of 2010 and be closer to 3 percent in 2011," the forecasting unit said in its report.
"With such sluggish growth, the unemployment rate will likely peak at 10.5 percent in the first quarter and remain at or above 10 percent for almost all of next year," the closely watched report added.
For many, the tough jobs market will obscure how the economy will be regaining its footing. "Things will be improving but it won't be obvious to people on Main Street," said David Shulman, a senior economist with the UCLA Anderson unit.
"People won't be spending aggressively and people will be worrying about their jobs," he said. "It'll be a long, slow healing process."
Shulman said his unit's outlook mirrors Federal Reserve Chairman Ben Bernanke's comments on Monday. Bernanke said the recovery remained fragile and unemployment may be high for some time, cooling talk of an early rise in interest rates fueled by a surprise fall in the jobless rate reported last week.
