The recession is officially over, but you wouldn’t know it from the state of the job market.
The unemployment rate has hovered near 10% throughout the year, and currently sits at 9.6%. There are still more than 6 million Americans who have been unemployed for six months or longer, and millions more who have abandoned the labor force altogether.
Fittingly, on Monday, right around the time that a group of economists declared the recession over, another study was released stating that it may take another two years for the job market to recover.
According to the Organisation for Economic Co-operation and Development, unemployment may not drop to pre-recession levels of roughly 6% until 2013.
“Supported by substantial stimulus measures, the U.S. economy has started to grow again after one of the most severe economic crises it has faced since the Great Depression,” the OECD said in a press release. However, there is still much work to be done.
The study pointed to factors like limited credit and a drop in average household net worth during the recession years as reasons for the slow return to a robust job market.“We don’t see a risk of a double-dip recession. That said, we don’t see either a recovery that is strong enough to put a significant dent in unemployment,” the report said.
In order to foster a better job market, the organization recommends providing more stimulus money, as well as extending unemployment benefits, job training and tax credits to companies that bring on new workers.
While the projection in this report may sound gloomy, it confirms the predictions of Austan Goolsbee, President Obama’s new chief economic adviser. In an interview earlier this month, Goolsbee stated that unemployment is “going to stay high,” and later added, “I don’t anticipate it coming down right away.”