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December 24, 2009

Will jobs return slowly?

Some positive signs in the economy are giving people hope the recession will end next year. However, the job market remains relatively weak. Should we expect a fast or slow pickup in jobs?

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

Unfortunately, the betting right now is on a slow pickup in jobs. And I think there are a couple of reasons for that. First of all, if you look at the last two recessions that we've experienced - in the early '90s and the early part of this decade - the rebound in jobs was very slow. So it looks like there's a precedent for that with recent recessions. Secondly, historical investigation shows that recessions in our country as well as other countries that included a banking crisis - and our recession included a banking crisis - those kinds of recessions are different, and they have also had very, very slow recoveries in jobs. I think this is due to the fact that if you have a banking crisis, the timing for banks to get back to normal, to have a rebound in their lending, is extended. And if we don't have bank lending, we don't have new projects, and we don't have job creation. So unfortunately, despite the fact we're all very anxious - the administration is anxious, people who are unemployed are very anxious for new jobs to be created and created fast - everything right now is pointing toward a very slow rebound in jobs."

Posted by Dave at December 24, 2009 08:00 AM