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The Fed released its latest Beige Book survey today, and more than anything, it tells us that we may just have to be patient about the job market’s recovery.
There’s a section titled “Reasons for Pessimism.” There isn’t one titled “Reasons for Optimism.” So that tells you something right there. But here’s how the Fed answers the question, is a jobless recovery in store?
The share of workers who have been laid off temporarily, rather than permanently, is at very low levels, and the number of workers who are involuntarily employed part-time is at historical highs. Both of these factors are likely to slow the recovery of the outflow rate over the course of the next several years.
The outflow rate is the rate at which unemployed people get jobs. Furthermore:
This projection indicates that the level of labor market slack would be higher by the end of 2009 than experienced at any other time in the post-World War II period, implying a longer and slower recovery path for the unemployment rate. This suggests that, more than in previous recessions, when the economy rebounds, employers will tap into their existing workforces rather than hire new workers. This could substantially slow the recovery of the outflow rate and put upward pressure on future unemployment rates.
It doesn’t exactly make you whistle while you, uh, look for work.
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