The recent report on global unemployment from the OECD predicted that developed country joblessness will reach post WW-II highs soon and will not improve much over the next two years.
Now, Noble Prize winner Paul Krugman has predicted that US unemployment will not peak until 2011. Speaking in Slovenia, Krugman said, “(U.S.) unemployment will peak in early 2011 … certainly staying very high and possibly rising all next year.”
[youtube=http://www.youtube.com/watch?v=6VilWv34OGY&w=560&h=340&fmt=18]
The current assumptions baked into the Budget and stimulus package are that unemployment will stay below 10% and will recover fairly rapidly after the recession ends, which should be during the current quarter. Most signs point to these forecasts as being much too optimistic. That means that tax receipts will be below forecasts and the deficit will rise more than expected. It also means that the engine of GDP growth, consumer spending, will not rebound at any point in the foreseeable future.
All that being said, the drag of the jobless will pull the economy back under.
For more 24/7 Wall St. TV visit us here.
Executive Producer: Philip MacDonald
Take This Retirement Quiz To Get Matched With An Advisor Now (Sponsored)
Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.
Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.
Click here now to get started.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
