Analysis: Stagnant U.S. jobs market bodes ill for world conomy
On Thursday September 29, 2011, 9:57 am
By Alan Wheatley, Global conomics Correspondent
LONDON (Reuters) – Record-high long-term unemployment is testing politicians and central bankers to the utmost as the impact of a shortfall in demand is amplified by an aging population, a mismatch of skills and inadequate efforts to get people back to work.
That’s a summary not of Europe, typically associated with rigid hiring and firing laws and excessive non-wage costs, but of the United States, long renowned for a labor market as dynamic as its entrepreneurs.
America’s jobs machine is now spluttering badly, an ominous development for businesses worldwide hoping for a revival in the world’s largest conomy to relieve the gloom cast by the euro zone debt crisis.
Figures due on October 7 are likely to show the unemployment rate stuck at 9.1 percent in October despite near-zero interest rates. Alarmingly, an unprecedented 30 percent of the jobless have been out of work for a year — a stagnant pool of workers whose job prospects can only decline as their skills rust.
“There is clearly a risk for the United States of repeating the experience in European countries of cyclical unemployment turning into structural unemployment,” said Mark Keese, head of the employment analysis division at the Organization for conomic Cooperation and Development in Paris.