U.S. GDP Report Heralds Still Higher US Unemployment

Economics / US Economy
Oct 31, 2010 - 04:14 PM

By: Barry_Grey

The Commerce Department on Friday estimated that the US economy grew at an anemic annual rate of 2.0 percent in the third quarter, a pace that all but ensures a further rise in unemployment.

The government claims that the recession ended in June of 2009, but the quarterly increases in the nation’s gross domestic product (GDP) this year have been far below those recorded following previous major recessions. US GDP rose 3.7 percent in the first quarter of 2010 and then slowed to 1.7 percent in the second.

A rate of 2 percent is insufficient to reduce joblessness, which is officially already at the stratospheric level of 9.6 percent. The Wall Street Journal reported Friday that Bank of America Merrill Lynch economists predict the jobless rate will surpass 10 percent and remain there for most of 2011.

A Bloomberg News survey of economists concluded that unemployment will remain above 9 percent through 2011, completing a three-year stretch of 9 percent-plus joblessness, the longest period since records began in 1948.

The Federal Reserve Bank of San Francisco recently issued the following grim prognosis for the US economy: “The economic recovery is proceeding at a very slow pace and has lost momentum since the spring. No sector of the private economy stands ready to drive a robust recovery.â€