A just released report by the Washington-based Center for Economic and Policy Research states that Congress appears to have underestimated the disastrous consequences the current recession has on employment. The study, entitled, “The Urgent Need for Job Creation” shows that with a job growth path comparable to the last recovery, the economy will not recover all of the jobs lost in the recession until March 2014. Assuming the trend rate of growth in the labor force, the unemployment rate will not fall back to the pre-recession level until April 2021.
The new report compares various job growth scenarios with the job loss seen in the recession and projects when the lost jobs will be regained and when the unemployment rate will return to pre-recession levels in each case.
According to the study, if even more rapid growth is realized like that experienced in the 1990s expansion, the analysis shows that the U.S. economy does not reach the December 2007 level until September 2010 and does not create enough new jobs to return to the pre-recession unemployment level until September 2014. If faster growth rates of the mid-1970s and early-1980s are applied, the economy returns to December 2007 employment levels in November 2011 and pre-recession unemployment rates by October of 2012.
Current Congressional Budget Office (CBO) projections indicate that future job growth will fall somewhere between the rates of the two most recent expansions.
This means that absent serious job creation policies, the economy will not reach pre-recession levels until well after the 2012 election cycle (June 2013), and not return to an unemployment rate near the pre-recession level until August of 2015.
