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Kai Ryssdal: So we got what might best be described as a perfectly OK report out of the Labor Department this morning. The number of jobs in the American economy increased by 103,000 last month. There are some statistical twists and turns, but that’s a solid headline number. The unemployment rate is stuck at 9.1 percent.
Now I want you to forget about all that, wash it out of your mind. ‘Cause really, in something as big as the American economy, it’s not the month-to-month ups and downs you’ve got to worry about. Marketplace’s Mitchell Hartman has the long-term forecast.
Mitchell Hartman: Now that we added more than 100,000 jobs in September, we might be tempted to cue the happy music.
The Cars’ “Let the Good Times Roll”
Not so fast, says economist Kevin Hassett at the American Enterprise Institute.
Kevin Hassett: Right now, this is about as good as it gets.
Hassett thinks we’ll plateau around 100,000 new jobs a month for the foreseeable future. Meaning the unemployment rate won’t budge and the six million long-term unemployed won’t get back on the job, says Harvard economist Lawrence Katz.
Lawrence Katz: The modest job growth that we’ve seen is just about what you need to keep up with population growth. It’s not enough to bring people back to work.
And Kevin Hassett says we shouldn’t really be surprised because this has been no ordinary recession.
Hassett: No, no, we have to compare ourselves really to the Great Depression. It’s the last time that we’ve had this big a financial crisis at the onset of a recession.
Now, the most recent recessions in the 1990s and 2000s also had pretty much ‘jobless recoveries.’ But they didn’t also come with a collapse of global finance and waves of consumer and business panic, so they weren’t nearly as long or deep.
Hassett: In the longer recession, you tend to see cyclical unemployment become structural unemployment, because people who haven’t had a job for a while had a really hard time getting one again.
Many economists now predict we could still have 8 percent unemployment in 2018, and that many of today’s long-term unemployed will simply have stopped looking for good by then.
I’m Mitchell Hartman for Marketplace.
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