Small BusinessIt may take US over seven yrs to wipe off job deficit: Report
The indications of economic recovery notwithstanding, the revival in the job market still have a long way to go, as a latest study says that it may take more than seven years for the US to wipe off the job deficit.
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The US economy has lost a whopping 263,000 jobs in September leading to a 26-year-high rise in unemployment rate at 9.8 per cent.
According to the report, "America"s New Post-Recession Employment Arithmetic", erasing the job deficit would require substantial and sustained employment growth in the country.
"Even if the nation could add 2.15 million private-sector jobs per year starting January 2010, it would need to maintain this pace for more than seven straight years (7.63 years), or until August 2017, to eliminate the job deficit," the report forecast.
The report is authored by Edward J Bloustein School of Planning and Public Policy"s Dean James W Hughes and an economist at the school Joseph J Seneca.
"Because of the severity of the 2007-09 employment losses due to recession, the US faces a significant employment deficit as it confronts the realities of a post-recession future," the report added.
Recently, US President Barack Obama also said the record job losses being witnessed were certainly a "sobering reminder" that progress comes in fits and starts and the US would need to grind out this recovery.
Since December 2007, when the US economy officially slipped into recession, the count of people without a job has shot up by 7.6 million to as much as 15.1 million. The rate of job loss has doubled to 9.8 per cent during the same period.
"The 2007–2009 recession is the worst employment setback in the US since the Great Depression," the study stated.
The key conclusions of the report stated that a long period of job growth would be needed just to eliminate a ballooning employment deficit stemming from a deep, lengthy recession.
Moreover, several new business-cycle dynamics imply that the employment recovery may be delayed significantly even after the recession ends.
"The once recession-resistant services sector may now be much more vulnerable to job losses and global competition and thus, may be a less vibrant source of employment growth going forward," it added.